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, 2015, and a statement of the funded status at December 31 for both years.



	Pension Benefits												Other Benefits
	2015						2014						2015			2014
	U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1	$	102,312		$	69,488		$	92,839		$	60,471		$	22,855		$	21,354
Service cost	1,279			1,506			1,162			1,331			673			714
Interest cost	3,770			1,734			4,037			2,345			833			932
Plan amendments	113			—			—			(150		)	—			—
Benefits paid	(3,985		)	(2,448		)	(6,230		)	(2,955		)	(622		)	(691		)
Actuarial loss (gain)	(5,013		)	(6,909		)	10,540			15,092			(2,966		)	728
Currency translation	—			(5,308		)	—			(6,646		)	(373		)	(182		)
Curtailments/settlements	—			—			(36		)	—			—			—
Obligation at December 31	$	98,476		$	58,063		$	102,312		$	69,488		$	20,400		$	22,855
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1	$	79,687		$	22,152		$	81,957		$	22,334		$	—		$	—
Actual return on plan assets	(2,587		)	205			2,385			1,738			—			—
Employer contributions	4,460			1,837			1,611			2,424			622			691
Benefits paid	(3,985		)	(2,448		)	(6,230		)	(2,955		)	(622		)	(691		)
Currency translation	—			(1,101		)	—			(1,389		)	—			—
Settlements	—			—			(36		)	—			—			—
Fair value of plan assets at December 31	$	77,575		$	20,645		$	79,687		$	22,152		$	—		$	—
Funded status at December 31	$	(20,901	)	$	(37,418	)	$	(22,625	)	$	(47,336	)	$	(20,400	)	$	(22,855	)
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Current liabilities	$	(743	)	$	(875	)	$	(522	)	$	(805	)	$	(911	)	$	(905	)
Other noncurrent liabilities	(20,158		)	(36,543		)	(22,103		)	(46,531		)	(19,489		)	(21,950		)
Net liability at December 31	$	(20,901	)	$	(37,418	)	$	(22,625	)	$	(47,336	)	$	(20,400	)	$	(22,855	)

The accumulated benefit obligation (“ABO”) for all defined benefit pension plans was $150.4 million and $163.3 million at December 31, 2015 and 2014, respectively.

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2015 and 2014 were as follows:



	U.S. Plans				Non-U.S. Plans
	2015		2014		2015		2014
Discount rate	4.12	%	3.78	%	2.99	%	2.66	%
Rate of compensation increase	4.00	%	4.00	%	2.98	%	3.00	%

The pretax amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2015 and 2014 were as follows:



	Pension Benefits										Other Benefits
	2015					2014					2015			2014
	U.S.		Non-U.S.			U.S.		Non-U.S
	(In thousands)
Prior service cost (credit)	$	135	$	(38	)	$	86	$	(40	)	$	(1,215	)	$	(1,580	)
Net loss	33,461		15,330			34,337		25,275			(2,197		)	655
Total	$	33,596	$	15,292		$	34,423	$	25,235		$	(3,412	)	$	(925	)

The amounts in Accumulated other comprehensive income (loss) as of December 31, 2015, that are expected to be recognized as components of net periodic benefit cost during 2016 are as follows:



	U.S. Pension Benefit Plans		Non-U.S. Pension Benefit Plans			Other Benefit Plans			Total
	(In thousands)
Prior service cost (credit)	$	24	$	(15	)	$	(366	)	$	(357	)
Net loss	3,285		1,028			(249		)	4,064
Total	$	3,309	$	1,013		$	(615	)	$	3,707

The components of, and the weighted average assumptions used to determine, the net periodic benefit cost for the plans in 2015, 2014 and 2013 are as follows:



	Pension Benefits
	2015						2014						2013
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
Service cost	$	1,279		$	1,506		$	1,162		$	1,331		$	1,526		$	1,388
Interest cost	3,770			1,734			4,037			2,345			3,766			2,146
Expected return on plan assets	(4,910		)	(1,114		)	(5,430		)	(1,297		)	(5,318		)	(1,055		)
Net amortization	3,422			1,931			2,187			1,400			7,621			955
Net periodic benefit cost	$	3,561		$	4,057		$	1,956		$	3,779		$	7,595		$	3,434



	Other Benefits
	2015			2014			2013
	(In thousands)
Service cost	$	673		$	714		$	968
Interest cost	833			932			906
Net amortization	(414		)	(474		)	24
Net periodic benefit cost	$	1,092		$	1,172		$	1,898



	U.S. Plans						Non-U.S. Plans
	2015		2014		2013		2015		2014		2013
Discount rate	3.78	%	4.61	%	3.56	%	2.66	%	4.03	%	3.91	%
Expected return on plan assets	6.50	%	7.00	%	7.50	%	5.19	%	5.83	%	5.53	%
Rate of compensation increase	4.00	%	4.00	%	3.94	%	3.00	%	3.14	%	2.99	%

The pretax change recognized in Accumulated other comprehensive income (loss) in 2015 is as follows:



	Pension Benefits						Other Benefits
	U.S.			Non-U.S.
	(In thousands)
Net gain (loss) in current year	$	(2,483	)	$	6,000		$	2,967
Prior service cost	(113		)	—			—
Amortization of prior service cost (credit)	64			(15		)	(365		)
Amortization of net loss	3,359			1,946			(48		)
Exchange rate effect on amounts in OCI	—			2,012			(67		)
Total	$	827		$	9,943		$	2,487

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.

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 $10.3 million, $9.1 million and $8.4 million for 2015, 2014 and 2013, respectively.

The Company, through its subsidiaries, participates in certain multi-employer pension plans covering approximately 398 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, $1.0 million, and $1.1 million for 2015, 2014 and 2013, respectively.

For measurement purposes, a 6.94% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2015. 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 $0.2 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 $1.3 million.

Plan Assets

The Company’s pension plan weighted average asset allocations at December 31, 2015 and 2014, by asset category, were as follows:



	2015		2014
Equity securities	46	%	51	%
Fixed income securities	48	%	49	%
Cash/Other	6	%	—	%
Total	100	%	100	%

The basis used to measure the defined benefit plans’ assets at fair value at December 31, 2015 and 2014 is summarized as follows:



	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2015	(In thousands)
Equity
U.S. Large Cap	$	23,465	$	23,465	$	—	$	—
U.S. Small / Mid Cap	10,184		7,482		2,702		—
International	11,986		7,786		4,200		—
Fixed Income
U.S. Intermediate	15,000		15,000		—		—
U.S. Short Duration	8,935		8,935		—		—
U.S. High Yield	7,758		6,922		836		—
International	15,249		7,241		8,008		—
Cash and Equivalents	1,829		1,829		—		—
Other	3,836		—		3,836		—
	$	98,242	$	78,660	$	19,582	$	—



	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		—
Cash and Equivalents	2,329		2,329		—		—
Other	284		—		284		—
	$	101,916	$	81,013	$	20,903	$	—

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, 2015 and 2014, there were no shares of the Company’s stock held in plan assets.

Cash Flows

The Company expects to contribute approximately $6.1 million to its defined benefit plans and $0.9 million to its other postretirement benefit plans in 2016. The Company also expects to contribute approximately $20.8 million to its defined contribution plan and $8.1 million to its 401(k) savings plan in 2016.

Estimated Future Benefit Payments

The future estimated benefit payments for the next five years and the five years thereafter are as follows: 2016 — $14.2 million; 2017 — $10.0 million; 2018 — $10.6 million; 2019 — $10.3 million; 2020 — $10.6 million; 2021 to 2025 — $52.6 million.