Retirement Benefits

The Company sponsors several qualified and nonqualified pension plans and other postretirement plans for its employees. The Company uses a measurement date of December 31 for its defined benefit pension plans and post retirement medical plans. The Company employs the measurement date provisions of ASC 715, “Compensation-Retirement Benefits”, which require the measurement date of plan assets and liabilities to coincide with the sponsor’s year end.

The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets over the two-year period ended December 31, 2014, and a statement of the funded status at December 31 for both years.



	Pension Benefits												Other Benefits
	2014						2013						2014			2013
	U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1	$	92,839		$	60,471		$	111,188		$	56,555		$	21,354		$	25,587
Service cost	1,162			1,331			1,526			1,388			714			968
Interest cost	4,037			2,345			3,766			2,146			932			906
Plan amendments	—			(150		)	—			—			—			—
Benefits paid	(6,230		)	(2,955		)	(2,479		)	(1,957		)	(691		)	(801		)
Actuarial loss (gain)	10,540			15,092			(11,885		)	581			728			(5,139		)
Currency translation	—			(6,646		)	—			1,758			(182		)	(167		)
Curtailments/settlements	(36		)	—			(9,277		)	—			—			—
Acquisition	—			—			—			—			—			—
Obligation at December 31	$	102,312		$	69,488		$	92,839		$	60,471		$	22,855		$	21,354
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1	$	81,957		$	22,334		$	74,578		$	19,660		$	—		$	—
Actual return on plan assets	2,385			1,738			14,303			2,341			—			—
Employer contributions	1,611			2,424			4,832			1,840			691			801
Benefits paid	(6,230		)	(2,955		)	(2,479		)	(1,957		)	(691		)	(801		)
Currency translation	—			(1,389		)	—			447			—			—
Settlements	(36		)	—			(9,277		)	3			—			—
Other	—			—			—			—			—			—
Fair value of plan assets at December 31	$	79,687		$	22,152		$	81,957		$	22,334		$	—		$	—
Funded status at December 31	$	(22,625	)	$	(47,336	)	$	(10,882	)	$	(38,138	)	$	(22,855	)	$	(21,354	)
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Current liabilities	$	(522	)	$	(805	)	$	(656	)	$	(995	)	$	(905	)	$	(946	)
Other noncurrent liabilities	(22,103		)	(46,531		)	(10,226		)	(37,143		)	(21,950		)	(20,408		)
Net liability at December 31	$	(22,625	)	$	(47,336	)	$	(10,882	)	$	(38,138	)	$	(22,855	)	$	(21,354	)

The accumulated benefit obligation (ABO) for all defined benefit pension plans was $163.3 million and $143.5 million at December 31, 2014 and 2013, respectively.

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2014 and 2013 were as follows:



	U.S. Plans				Non-U.S. Plans
	2014		2013		2014		2013
Discount rate	3.78	%	4.61	%	2.66	%	4.03	%
Rate of compensation increase	4.00	%	4.00	%	3.00	%	3.14	%

The pretax amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2014 and 2013 were as follows:



	Pension Benefits									Other Benefits
	2014					2013				2014			2013
	U.S.		Non-U.S.			U.S.		Non-U.S
	(In thousands)
Prior service cost (credit)	$	86	$	(40	)	$	170	$	312	$	(1,580	)	$	(1,951	)
Net loss	34,337		25,275			22,854		14,262		655			(225		)
Total	$	34,423	$	25,235		$	23,024	$	14,574	$	(925	)	$	(2,176	)

The amounts in Accumulated other comprehensive income (loss) as of December 31, 2014, that are expected to be recognized as components of net periodic benefit cost during 2015 are as follows:



	U.S. Pension Benefit Plans		Non-U.S. Pension Benefit Plans			Other Benefit Plans			Total
	(In thousands)
Prior service cost (credit)	$	51	$	(14	)	$	(366	)	$	(329	)
Net loss	3,130		1,904			(50		)	4,984
Total	$	3,181	$	1,890		$	(416	)	$	4,655

The following tables provide the components of, and the weighted average assumptions used to determine, the net periodic benefit cost for the plans in 2014, 2013 and 2012:



	Pension Benefits
	2014						2013						2012
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
Service cost	$	1,162		$	1,331		$	1,526		$	1,388		$	1,756		$	1,300
Interest cost	4,037			2,345			3,766			2,146			4,247			2,206
Expected return on plan assets	(5,430		)	(1,297		)	(5,318		)	(1,055		)	(4,687		)	(1,035		)
Net amortization	2,187			1,400			7,621			955			5,376			589
Net periodic benefit cost	$	1,956		$	3,779		$	7,595		$	3,434		$	6,692		$	3,060



	Other Benefits
	2014			2013		2012
	(In thousands)
Service cost	$	714		$	968	$	763
Interest cost	932			906		922
Net amortization	(474		)	24		11
Net periodic benefit cost	$	1,172		$	1,898	$	1,696



	U.S. Plans						Non-U.S. Plans
	2014		2013		2012		2014		2013		2012
Discount rate	4.61	%	3.56	%	4.45	%	4.03	%	3.91	%	4.68	%
Expected return on plan assets	7.00	%	7.50	%	8.00	%	5.83	%	5.53	%	5.90	%
Rate of compensation increase	4.00	%	3.94	%	3.90	%	3.14	%	2.99	%	2.96	%

The following table provides the pretax change recognized in Accumulated other comprehensive income (loss) in 2014:



	Pension Benefits
	U.S.			Non-U.S.			Other Benefits
	(In thousands)
Net loss in current year	$	(13,585	)	$	(14,650	)	$	(730	)
Prior service cost	—			150			—
Amortization of prior service cost (credit)	84			188			(371		)
Amortization of net loss	2,102			1,212			(103		)
Exchange rate effect on amounts in OCI	—			2,439			(47		)
Total	$	(11,399	)	$	(10,661	)	$	(1,251	)

The discount rates for our plans are derived by matching the plan’s cash flows to a yield curve that provides the equivalent yields on zero-coupon bonds for each maturity. The discount rate selected is the rate that produces the same present value of cash flows.

In selecting the expected rate of return on plan assets, the Company considers the historical returns and expected returns on plan assets. The expected returns are evaluated using asset return class, variance and correlation assumptions based on the plan’s target asset allocation and current market conditions.

Mortality assumptions are used to estimate life expectancies of plan participants. In October 2014, the Society of Actuaries ("SOA") issued updated mortality tables (RP-2014) and a mortality improvement scale (MP-2014), which reflects longer life expectancies than previously projected. In consideration of this information, we studied our historical mortality experience and developed an expectation for continued future mortality improvements. Based on this data and the RP-2014 tables, we updated the mortality assumptions used in calculating our pension and post-retirement benefit obligations recognized at December 31, 2014, and the amounts estimated for our 2015 expense. Our updated mortality assumptions resulted in an increase of $4.9 million in our pension and post-retirement benefit obligations as of December 31, 2014.

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation or the market value of assets are amortized over the average remaining service period of active participants.

Costs of defined contribution plans were $9.1 million, $8.4 million and $7.9 million for 2014, 2013 and 2012, respectively.

The Company, through its subsidiaries, participates in certain multi-employer pension plans covering approximately 395 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $1.0 million, $1.1 million, and $1.0 million for 2014, 2013 and 2012, respectively.

For measurement purposes, a 7.12% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2014. The rate was assumed to decrease gradually each year to a rate of 4.50% for 2027, and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A 1% increase in the assumed health care cost trend rates would increase the service and interest cost components of the net periodic benefit cost by $0.1 million and the health care component of the accumulated postretirement benefit obligation by $1.6 million. A 1% decrease in the assumed health care cost trend rate would decrease the service and interest cost components of the net periodic benefit cost by $0.1 million and the health care component of the accumulated postretirement benefit obligation by $1.4 million.

Plan Assets

The Company’s pension plan weighted average asset allocations at December 31, 2014 and 2013, by asset category, were as follows:



	2014		2013
Equity securities	51	%	66	%
Fixed income securities	49	%	34	%
Total	100	%	100	%

The following tables summarize the basis used to measure the defined benefit plans’ assets at fair value at December 31, 2014 and 2013:



	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2014	(In thousands)
Equity
U.S. Large Cap	$	26,787	$	26,787	$	—	$	—
U.S. Small / Mid Cap	7,950		7,950		—		—
International	14,797		8,275		6,522		—
Fixed Income
U.S. Intermediate	14,906		14,906		—		—
U.S. Short Duration	8,817		8,817		—		—
U.S. High Yield	5,270		5,270		—		—
International	20,776		6,679		14,097		—
Other
Insurance Contracts	284		—		284		—
Cash and Equivalents	2,329		2,329		—		—
	$	101,916	$	81,013	$	20,903	$	—



	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2013	(In thousands)
Equity
U.S. Large Cap	$	31,831	$	31,831	$	—	$	—
U.S. Small / Mid Cap	8,783		8,783		—		—
International	25,591		25,591		—		—
Fixed Income
U.S. Intermediate	18,715		18,715		—		—
U.S. Short Duration	8,954		8,954		—		—
U.S. High Yield	1,581		1,581		—		—
International	5,812		5,812		—		—
Other
Insurance Contracts	331		—		331		—
Cash and Equivalents	2,693		2,693		—		—
	$	104,291	$	103,960	$	331	$	—

Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (“NAV”) provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors.

Investment Policies and Strategies

The investment objective of the plan, consistent with prudent standards for preservation of capital and maintenance of liquidity, is to earn the highest possible total rate of return consistent with the plan's tolerance for risk. The general asset allocation guidelines for plan assets are that “equities” will constitute from 40% to 60% of the market value of total fund assets with a target of 50%, and “fixed income” obligations, including cash, will constitute from 40% to 60% with a target of 50%. The term “equities” includes common stock, convertible bonds and convertible stock. The term “fixed income” includes preferred stock and/or contractual payments with a specific maturity date. The Company strives to maintain asset allocations within the designated ranges by conducting periodic reviews of fund allocations and plan liquidity needs, and rebalancing the portfolio accordingly. Diversification of assets is employed to ensure that adverse performance of one security or security class does not have an undue detrimental impact on the portfolio as a whole. Diversification is interpreted to include diversification by type, characteristic and number of investments, as well as by investment style of designated investment fund managers. No restrictions are placed on the selection of individual investments by the investment fund managers. The total fund performance and the performance of the investment fund managers is reviewed on a regular basis, using appointed professional independent advisors. As of December 31, 2014 and 2013, there were no shares of the Company’s stock held in plan assets.

Cash Flows

The Company expects to contribute approximately $1.6 million to its defined benefit plans and $0.5 million to its other postretirement benefit plans in 2015. The Company also expects to contribute approximately $9.1 million to its defined contribution plan and $8.0 million to its 401(k) savings plan in 2015.

Estimated Future Benefit Payments

The future estimated benefit payments for the next five years and the five years thereafter are as follows: 2015 — $9.0 million; 2016 — $9.6 million; 2017 — $10.1 million; 2018 — $10.7 million; 2019 — $10.7 million; 2020 to 2025 — $54.0 million.