Percentage of total plan assets categorized as level 1

  
Assumptions  
The weighted average assumptions used to determine benefit obligations for the Company’s plans, principally in foreign locations were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended December 31, |
|  |  | 2021 |  | 2020 |  | 2019 |
|  |  |  |  |  |  |  |
| Interest crediting rate |  | 1.3  | % |  | 1.3  | % |  | 1.3  | % |
| Discount rate |  | 1.1  | % |  | 0.6  | % |  | 1.0  | % |
| Rate of compensation increase |  | 2.6  | % |  | 2.4  | % |  | 2.5  | % |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |

  
The weighted average assumptions used to determine net periodic benefit cost for the Company’s plans, principally in foreign locations were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended December 31, |
|  |  | 2021 |  | 2020 |  | 2019 |
|  |  |  |  |  |  |  |
| Interest crediting rate |  | 1.3  | % |  | 1.3  | % |  | 1.3  | % |
| Discount rate |  | 0.6  | % |  | 1.0  | % |  | 1.8  | % |
| Expected return on plan assets |  | 2.2  | % |  | 2.3  | % |  | 2.9  | % |
| Rate of compensation increase |  | 2.4  | % |  | 2.5  | % |  | 2.5  | % |
| Measurement date |  | 12/31/2021 |  | 12/31/2020 |  | 12/31/2019 |

  
To develop the assumptions for the expected long-term rate of return on assets, the Company considered the current level of expected returns on risk free investments (primarily U.S. government bonds), the historical level of the risk premium associated with the other asset classes in which the assets are invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocations to develop the assumptions for the expected long-term rate of return on assets.  
Fair Value Measurements of Plan Assets  
The fair value of the Company’s pension plan assets at December 31, 2021 and 2020 is presented in the table below by asset category. Approximately 78% of the total plan assets are categorized as Level 1, and therefore, the values assigned to these pension assets are based on quoted prices available in active markets. For the other category levels, a description of the valuation is provided in Note 1, Significant Accounting Policies, under the “Fair Value Measurement” heading.

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | December 31, 2021 |
| (in millions) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |
|  |  |  |  |  |  |  |  |  |
| Assets Category |  |   |  |   |  |   |  |   |
| Cash and cash equivalents |  | $ | 17  |  |  | $ | 17  |  |  | $ | —  |  |  | $ | —  |  |
| Equity securities: |  |   |  |   |  |   |  |   |
|  |  |  |  |  |  |  |  |  |
| International |  | 65  |  |  | 65  |  |  | —  |  |  | —  |  |
| Fixed income securities: |  |   |  |   |  |   |  |   |
| Fixed rate bonds (a) |  | 66  |  |  | 66  |  |  | —  |  |  | —  |  |
| Other types of investments: |  |   |  |   |  |   |  |   |
| Mutual funds (b) |  | 18  |  |  | 18  |  |  | —  |  |  | —  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
| Insurance contracts |  | 34  |  |  | —  |  |  | —  |  |  | 34  |  |
| Hedge funds |  | 11  |  |  | —  |  |  | —  |  |  | 11  |  |
| Real estate |  | 1  |  |  | —  |  |  | —  |  |  | 1  |  |
| Total |  | $ | 212  |  |  | $ | 166  |  |  | $ | —  |  |  | $ | 46  |  |

105
