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EMPLOYEE BENEFIT PLANS
12 Months Ended
Dec. 31, 2017
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS

Pension plans
The Company has three frozen defined benefit pension plans covering certain employees or former employees of three U.S. subsidiaries. The Company also has pension plans covering certain employees of several foreign subsidiaries. The Company’s policy is to fund pension costs as required by law, which is consistent with the funding requirements of federal laws and regulations. Certain foreign subsidiaries maintain unfunded pension plans consistent with local practices and requirements.

The following table provides the change in benefit obligation, change in plan assets, funded status, and amounts recognized in the Consolidated Balance Sheet of the defined benefit pension plans as of December 31, 2017 and 2016 (amounts in thousands):
Change in benefit obligation:
2017
 
2016
Benefit obligation at beginning of year
$
113,119

 
$
115,598

Service cost
598

 
341

Interest cost
4,672

 
4,896

Actuarial (gain) loss
8,383

 
1,073

Benefits paid
(8,866
)
 
(8,572
)
Foreign currency translation
1,830

 
(217
)
Benefit obligation at end of year
$
119,736

 
$
113,119

Change in plan assets:
 

 
 

Fair value of plan assets at beginning of year
$
77,314

 
$
78,392

Actual return on plan assets
12,436

 
4,419

Employer contributions
914

 
2,399

Benefits paid
(7,809
)
 
(7,919
)
Foreign currency translation
181

 
23

Fair value of plan assets at end of year
$
83,036

 
$
77,314

Unfunded status at end of year
$
(36,700
)
 
$
(35,805
)
Amounts recognized in Consolidated Balance Sheet:
 

 
 

Noncurrent assets
$
948

 
$
901

Current liabilities
(2,040
)
 
(1,787
)
Noncurrent liabilities
(35,608
)
 
(34,919
)
Net amount recognized in the Consolidated Balance Sheet
$
(36,700
)
 
$
(35,805
)


The pension benefit obligation included $98.7 million of pension benefit obligation for the three frozen plans in the U.S. and $21.1 million of pension benefit obligation for plans at foreign subsidiaries. The fair value of plan assets included $81.3 million of plan assets for the three frozen plans in the U.S. and $1.7 million of plan assets for foreign plans.

Amounts recognized in accumulated other comprehensive loss:
 
 
 
 
2017
 
2016
Unrecognized prior service cost
$
(208
)
 
$
(344
)
Unrecognized net loss
(39,775
)
 
(41,011
)
Deferred tax effect of unrecognized items
15,856

 
15,705

Net amount recognized in accumulated other comprehensive loss
$
(24,127
)
 
$
(25,650
)

 
The weighted-average assumptions used in the actuarial computation that derived the benefit obligations at December 31 were as follows:
2017
 
2016
Discount rate
3.8
%
 
4.4
%
Expected long-term return on plan assets
7.4
%
 
7.4
%

 
The following table provides the components of net periodic pension cost for the plans, settlement cost, and the assumptions used in the measurement of the Company’s benefit obligation for the years ended December 31, 2017, 2016, and 2015 (amounts in thousands):
Components of net periodic benefit cost and other
amounts recognized in other comprehensive income (loss)
 
 
 
 
 
Net periodic benefit cost:
2017
 
2016
 
2015
Service cost
$
598

 
$
341

 
$
404

Interest cost
4,672

 
4,896

 
4,837

Assumed return on assets
(5,472
)
 
(5,600
)
 
(6,051
)
Amortization of unrecognized prior service cost
137

 
137

 
137

Amortization of net unrecognized loss
2,696

 
3,118

 
2,917

Net periodic pension cost
$
2,631

 
$
2,892

 
$
2,244



The estimated net loss and prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are $2.7 million and $0.1 million, respectively.

The weighted-average assumptions used in the actuarial computation that derived net periodic pension cost for the years ended December 31, 2017, 2016, and 2015 were as follows:
 
2017
 
2016
 
2015
Discount rate
5.8
%
 
5.8
%
 
5.8
%
Expected long-term return on plan assets
7.4
%
 
7.4
%
 
7.4
%


The allocation of the fair value of plan assets was as follows:
 
Percentage of Plan Assets
at December 31,
 
Target
Allocation
Asset Category
2017
 
2016
 
2017
U.S. equities (a)
61
%
 
56
%
 
40% - 80%
Fixed income
25
%
 
30
%
 
20% - 50%
Cash and cash equivalents
6
%
 
7
%
 
0% - 20%
International equities (a)
8
%
 
7
%
 
0% - 16%
 
100
%
 
100
%
 
 
 
(a)
Total equities may not exceed 80% of total plan assets.
 

The majority of the Company's foreign plans do not have plan assets. The foreign plans which have plan assets holds these plan assets in an insurance or money market fund.
 
The fair value of the plan assets by asset categories consisted of the following as of the dates set forth below (amounts in thousands):
 
Fair Value Measurements as of December 31, 2017
 
Total
 
Level 1
 
Level 2
 
Level 3
Money market funds
$
5,101

 
$
5,101

 
$

 
$

Common stock
35,300

 
35,300

 

 

Bonds and securities
5,370

 
5,370

 

 

Mutual and insurance funds
2,074

 
868

 
1,206

 

Totals
$
47,845

 
$
46,639

 
$
1,206

 
$

Assets measured at net asset value (a)
35,191

 
 
 
 
 
 
 
$
83,036

 
 
 
 
 
 

 
 
 
Fair Value Measurements as of December 31, 2016
 
Total
 
Level 1
 
Level 2
 
Level 3
Money market funds
$
5,114

 
$
5,114

 
$

 
$

Common stock
31,869

 
31,869

 

 

Bonds and securities
6,258

 
4,942

 
1,316

 

Mutual and insurance funds
2,485

 
829

 
1,656

 

Totals
$
45,726

 
$
42,754

 
$
2,972

 
$

Assets measured at net asset value (a)
31,588

 
 
 
 
 
 
 
$
77,314

 
 
 
 
 
 


(a)
Assets measured at net asset value consist of common / collective trusts.
    
The Company invests in a diversified portfolio consisting of an array of asset classes in an attempt to maximize returns while minimizing risk.  These asset classes include U.S. equities, fixed income, cash and cash equivalents, and international equities.  The investment objectives are to provide for the growth and preservation of plan assets on a long-term basis through investments in: investment grade securities that provide investment returns that meet or exceed the Standard & Poor’s 500 Index and investment grade fixed income securities that provide investment returns that meet or exceed the Barclays Capital Aggregate Bond Index.  The U.S. equities asset category included the Company’s common stock in the amount of $2.2 million (approximately three percent of total plan assets) at December 31, 2017, and $1.9 million (approximately two percent of total plan assets) at December 31, 2016.

The fair value of money market funds, stock, bonds, U.S. government securities and mutual funds is determined based on valuation for identical instruments in active markets.

The long-term rate of return for plan assets is determined using a weighted-average of long-term historical approximate returns on cash and cash equivalents, fixed income securities, and equity securities considering the anticipated investment allocation within the plans.  The expected return on plan assets is anticipated to be 7.4% over the long-term.  This rate assumes long-term historical returns of approximately 9% for equities and approximately 4.5% for fixed income securities using the plans’ target allocation percentages.  Professional investment firms, none of which are Titan employees, manage the plan assets.

Although the 2018 minimum pension funding calculations are not finalized, the Company estimates those funding requirements will be approximately $5 million.

Projected benefit payments from the plans as of December 31, 2017, are estimated as follows (amounts in thousands):
2018
$
9,398

2019
8,499

2020
8,607

2021
8,509

2022
8,522

2023-2027
39,645



401(k)/Defined contribution plans
The Company sponsors two 401(k) retirement savings plans in the U.S. and a number of defined contribution plans at foreign subsidiaries.  One U.S. plan is for the benefit of substantially all employees who are not covered by a collective bargaining arrangement.  Titan provides a 25% matching contribution in the form of the Company’s common stock on the first 6% of the employee’s contribution in this plan.  The Company issued 49,242 shares, 93,491 shares and 65,481 shares of treasury stock in connection with this 401(k) plan during 2017, 2016, and 2015, respectively.  Expenses to the Company related to this common stock matching contribution were $0.5 million, $0.5 million, and $0.6 million for 2017, 2016, and 2015, respectively. The other U.S. 401(k) plan is for employees covered by collective bargaining agreements and does not include a Company matching contribution. Expenses related to foreign defined contribution plans were $3.8 million, $3.6 million, and $3.7 million for 2017, 2016, and 2015, respectively.