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, 2013, and a statement of the funded status at December 31 for both years.



	Pension Benefits												Other Benefits
	2013						2012						2013			2012
	U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
CHANGE IN BENEFIT OBLIGATION
Obligation at January 1	$	111,188		$	56,555		$	101,511		$	47,763		$	25,587		$	21,073
Service cost	1,526			1,388			1,756			1,300			968			763
Interest cost	3,766			2,146			4,247			2,206			906			922
Plan amendments	—			—			59			410			—			159
Benefits paid	(2,479		)	(1,957		)	(4,097		)	(3,536		)	(801		)	(704		)
Actuarial loss (gain)	(11,885		)	581			13,202			6,700			(5,139		)	3,313
Currency translation	—			1,758			—			1,712			(167		)	61
Curtailments/settlements	(9,277		)	—			(5,490		)	—			—			—
Acquisition	—			—			—			—			—			—
Obligation at December 31	$	92,839		$	60,471		$	111,188		$	56,555		$	21,354		$	25,587
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1	$	74,578		$	19,660		$	59,619		$	16,914		$	—		$	—
Actual return on plan assets	14,303			2,341			6,177			1,944			—			—
Employer contributions⁽¹⁾	4,832			1,840			17,287			3,514			801			704
Benefits paid	(2,479		)	(1,957		)	(4,097		)	(3,536		)	(801		)	(704		)
Currency translation	—			447			—			810			—			—
Settlements	(9,277		)	3			(4,408		)	—			—			—
Other	—			—			—			14			—			—
Fair value of plan assets at December 31	$	81,957		$	22,334		$	74,578		$	19,660		$	—		$	—
Funded status at December 31	$	(10,882	)	$	(38,138	)	$	(36,610	)	$	(36,894	)	$	(21,354	)	$	(25,587	)
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS
Current liabilities	$	(656	)	$	(995	)	$	(588	)	$	(743	)	$	(946	)	$	(907	)
Other noncurrent liabilities	(10,226		)	(37,143		)	(36,022		)	(36,151		)	(20,408		)	(24,680		)
Net liability at December 31	$	(10,882	)	$	(38,138	)	$	(36,610	)	$	(36,894	)	$	(21,354	)	$	(25,587	)


(1)	Includes $10.0 million discretionary contribution to U.S. plan in 2012.

The accumulated benefit obligation (ABO) for all defined benefit pension plans was $143.5 million and $160.7 million at December 31, 2013 and 2012, respectively.

The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2013 and 2012 were as follows:



	U.S. Plans				Non-U.S. Plans
	2013		2012		2013		2012
Discount rate	4.61	%	3.56	%	4.03	%	3.91	%
Rate of compensation increase	4.00	%	3.94	%	3.14	%	2.99	%

The pretax amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2013 and 2012 were as follows:



	Pension Benefits								Other Benefits
	2013				2012				2013			2012
	U.S.		Non-U.S.		U.S.		Non-U.S
	(In thousands)
Prior service cost (credit)	$	170	$	312	$	275	$	330	$	(1,951	)	$	(2,325	)
Net loss	22,854		14,262		51,240		15,496		(225		)	5,279
Total	$	23,024	$	14,574	$	51,515	$	15,826	$	(2,176	)	$	2,954

The amounts in Accumulated other comprehensive income (loss) as of December 31, 2013, that are expected to be recognized as components of net periodic benefit cost during 2014 are as follows:



	U.S. Pension Benefit Plans		Non-U.S. Pension Benefit Plans		Other Benefit Plans			Total
	(In thousands)
Prior service cost (credit)	$	84	$	26	$	(371	)	$	(261	)
Net loss	2,306		851		(105		)	3,052
Total	$	2,390	$	877	$	(476	)	$	2,791

The following tables provide the components of, and the weighted average assumptions used to determine, the net periodic benefit cost for the plans in 2013, 2012 and 2011:



	Pension Benefits
	2013						2012						2011
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
Service cost	$	1,526		$	1,388		$	1,756		$	1,300		$	1,759		$	1,078
Interest cost	3,766			2,146			4,247			2,206			4,506			2,320
Expected return on plan assets	(5,318		)	(1,055		)	(4,687		)	(1,035		)	(4,755		)	(1,117		)
Net amortization	7,621			955			5,376			589			4,855			442
Net periodic benefit cost	$	7,595		$	3,434		$	6,692		$	3,060		$	6,365		$	2,723



	Other Benefits
	2013		2012		2011
	(In thousands)
Service cost	$	968	$	763	$	691
Interest cost	906		922		1,035
Net amortization	24		11		(156		)
Net periodic benefit cost	$	1,898	$	1,696	$	1,570



	U.S. Plans						Non-U.S. Plans
	2013		2012		2011		2013		2012		2011
Discount rate	3.56	%	4.45	%	5.20	%	3.91	%	4.68	%	5.35	%
Expected return on plan assets	7.50	%	8.00	%	8.25	%	5.53	%	5.90	%	6.17	%
Rate of compensation increase	3.94	%	3.90	%	3.90	%	2.99	%	2.96	%	3.37	%

The following table provides the pretax change recognized in Accumulated other comprehensive income (loss) in 2013:



	Pension Benefits
	U.S.		Non-U.S.			Other Benefits
	(In thousands)
Net loss in current year	$	20,869	$	708		$	5,140
Prior service cost	—		—			—
Amortization of prior service cost (credit)	104		25			(373		)
Amortization of net loss	7,518		929			396
Exchange rate effect on amounts in OCI	—		(410		)	(33		)
Total	$	28,491	$	1,252		$	5,130

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 $8.4 million, $7.9 million and $7.8 million for 2013, 2012 and 2011, respectively.

The Company, through its subsidiaries, participates in certain multiemployer pension plans covering approximately 393 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $1.1 million, $1.0 million, and $1.0 million for 2013, 2012 and 2011, respectively.

For measurement purposes, a 7.27% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2013. The rate was assumed to decrease gradually each year to a rate of 4.49% 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 $1.4 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 $0.2 million and the health care component of the accumulated postretirement benefit obligation by $1.2 million.

Plan Assets

The Company’s pension plan weighted average asset allocations at December 31, 2013 and 2012, by asset category, were as follows:



	2013		2012
Equity securities	66	%	68	%
Fixed income securities	34	%	32	%
Total	100	%	100	%

The following tables summarize the basis used to measure the defined benefit plans’ assets at fair value at December 31, 2013 and 2012:



	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	$	—



	Basis of Fair Value Measurement
	Outstanding Balances		Level 1		Level 2		Level 3
As of December 31, 2012	(In thousands)
Equity
U.S. Large Cap	$	32,496	$	32,496	$	—	$	—
U.S. Small / Mid Cap	7,770		7,770		—		—
International	20,869		13,082		7,787		—
Fixed Income
U.S. Intermediate	25,069		25,069		—		—
U.S. Short Duration	—		—		—		—
U.S. High Yield	—		—		—		—
International	5,489		5,489		—		—
Other
Insurance Contracts	326		326		—		—
Cash and Equivalents	2,219		2,219		—		—
	$	94,238	$	86,451	$	7,787	$	—

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 objectives of the Company’s plan assets are to earn the highest possible rate of return consistent with the tolerance for risk as determined periodically by the Company in its role as a fiduciary. The general guidelines of asset allocation of fund assets are that “equities” will represent from 50% to 60% of the market value of total fund assets with a target of 50% by June 30, 2015, and “fixed income” obligations, including cash, will represent from 40% to 50% with a target of 50% by June 30, 2015. 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. The total fund performance is monitored and results measured using a 3- to 5-year moving average against long-term absolute and relative return objectives to meet actuarially determined forecasted benefit obligations. No restrictions are placed on the selection of individual investments by the qualified investment fund managers. The performance of the investment fund managers is reviewed on a regular basis, using appointed professional independent advisors. As of December 31, 2013 and 2012, there were no shares of the Company’s stock held in plan assets.

Cash Flows

The Company expects to contribute approximately $2.8 million to its defined benefit plans and $0.9 million to its other postretirement benefit plans in 2014. The Company also expects to contribute approximately $8.4 million to its defined contribution plan and $7.3 million to its 401(k) savings plan in 2014.

Estimated Future Benefit Payments

The future estimated benefit payments for the next five years and the five years thereafter are as follows: 2014 — $9.1 million; 2015 — $8.5 million; 2016 — $9.0 million; 2017 — $9.4 million; 2018 — $9.9 million; 2019 to 2023 — $53.0 million