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Employee Benefits
 12 Months Ended
Dec. 31, 2013
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS
 
Defined contribution plan. The Company has a savings and investment plan (the “401k Plan”) covering substantially all U.S. employees. Company contributions are based upon the level of employee contributions, up to a maximum of 4% of the employee’s eligible salary, subject to an annual maximum. For 2013, the maximum match was $7,000. Amounts expensed in connection with the 401k Plan totaled $15.8 million, $14.2 million, and $15.9 million, in 2013, 2012, and 2011, respectively.
 
Deferred compensation plan. The Company has a supplemental deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees, which is structured as a rabbi trust. The plan’s investment assets are classified in Other assets on the Consolidated Balance Sheets at fair value. The value of these assets was $32.6 million and $27.8 million at December 31, 2013 and 2012, respectively (see Note 12 — Fair Value Disclosures for fair value information). The corresponding deferred compensation liability of $36.4 million and $31.3 million at December 31, 2013 and 2012, respectively, is carried at fair value, and is adjusted with a corresponding charge or credit to compensation cost to reflect the fair value of the amount owed to the employees which is classified in Other liabilities on the Consolidated Balance Sheets. Total compensation expense recognized for the plan was $0.4 million in both 2013 and 2012 and $0.3 million in 2011.
 
Defined benefit pension plans. The Company has defined-benefit pension plans in several of its non-U.S. locations. Benefits earned under these plans are based on years of service and level of employee compensation. The Company accounts for defined benefit plans in accordance with the requirements of FASB ASC Topics 715 and 960.
 
The following are the components of defined benefit pension expense for the years ended December 31 (in thousands):
 
 
2013
 
2012
 
2011
Service cost (1)
$
2,545

 
$
1,775

 
$
1,890

Interest cost
1,075

 
980

 
1,010

Expected return on plan assets
(340
)
 
(115
)
 
(125
)
Recognition of actuarial loss (gain)
30

 
(215
)
 
(135
)
Recognition of termination benefits
455

 
175

 
65

Total defined benefit pension expense (2)
$
3,765

 
$
2,600

 
$
2,705

 

(1)
The higher 2013 service cost was primarily due to additional employees covered under the plans.
(2)
Pension expense is classified in SG&A in the Consolidated Statements of Operations.

The following are the assumptions used in the computation of pension expense for the years ended December 31:
 
2013
 
2012
 
2011
Weighted-average discount rate (1)
3.35
%
 
3.20
%
 
4.40
%
Average compensation increase
2.70
%
 
2.70
%
 
2.65
%
 

(1)
Discount rates are typically determined by utilizing the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.






The following table provides information related to changes in the projected benefit obligation for the years ended December 31 (in thousands):
 
 
2013
 
2012
 
2011
Projected benefit obligation at beginning of year
$
31,605

 
$
21,160

 
$
19,730

Service cost
2,545

 
1,775

 
1,890

Interest cost
1,075

 
980

 
1,010

Actuarial loss (gain) due to assumption changes and plan experience (1)
625

 
6,265

 
(948
)
Additions and contractual termination benefits
460

 
1,925

 
—

Benefits paid (2)
(1,255
)
 
(680
)
 
(390
)
Foreign currency impact
(470
)
 
180

 
(132
)
Projected benefit obligation at end of year (3)
$
34,585

 
$
31,605

 
$
21,160

 

(1)
The 2012 actuarial loss was primarily due to a decline in the weighted-average discount rate.

(2)
The Company projects the following approximate amounts will be paid in future years to plan participants: $0.6 million in 2014; $1.8 million in 2015; $0.7 million in 2016; $1.1 million in 2017; $1.0 million in 2018; and $7.5 million in the five years thereafter.

(3)
Measured as of December 31.

The following table provides information regarding the funded status of the plans and related amounts recorded in the Company’s Consolidated Balance Sheets as of December 31 (in thousands):
 
Funded status of the plans:
 
2013
 
2012
 
2011
Projected benefit obligation
$
34,585

 
$
31,605

 
$
21,160

Plan assets at fair value (1)
(13,870
)
 
(8,885
)
 
(2,480
)
Funded status – shortfall (2)
$
20,715

 
$
22,720

 
$
18,680

Amounts recorded in the Consolidated Balance Sheets for the plans:
 
 
 
 
 
Other liabilities — accrued pension obligation (2)
$
20,715

 
$
22,720

 
$
18,680

Stockholders’ equity — deferred actuarial (loss) gain (3)
$
(1,811
)
 
$
(1,578
)
 
$
2,488

 

(1)
The plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, and the Company considers the overall portfolio of these assets to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 3.8%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. For the year-ended December 31, 2013, the Company contributed $5.9 million to these plans, and benefits paid to participants were $1.3 million.

In addition to the plan assets held with third-party trustees, the Company also maintains a reinsurance asset arrangement with a large international insurance company. The reinsurance asset is an asset of the Company whose purpose is to provide funding for benefit payments for one of the plans. At December 31, 2013, the reinsurance asset was carried on the Company’s Consolidated Balance Sheets at its cash surrender value of $9.3 million and is classified in Other Assets. The Company believes the cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value framework in ASC Topic 820.

(2)
The Funded status — shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. This amount is a liability of the Company and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheets.

(3)
The deferred actuarial loss as of December 31, 2013, is recorded in Accumulated Other Comprehensive Income (“AOCI”) and will be reclassified out of AOCI and recognized as pension expense over approximately 15 years, subject to certain limitations set forth in FASB ASC Topic 715. The impact of this amortization on the periodic pension expense in 2014 is projected to be less than $0.1 million. The actual amortization of deferred actuarial losses (gains) from AOCI to pension expense was less than $0.1 million in 2013, $(0.2) million in 2012, and $(0.1) million in 2011.