Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Change in Projected Benefit Obligations, Fair Value of Plan Assets and the Funded Status of Pension Plan

The following table summarizes the change in projected benefit obligations, fair value of plan assets and the funded status of pension plan for the years ended December 31, 2017 and 2016 (in thousands):


	U.S. Pension Plans						Non-U.S. Pension Plans
	2017			2016			2017			2016
Change in Projected Benefit Obligation:
Projected benefit obligation at beginning of year	$	45,270		$	42,999		$	35,706		$	36,372
Service cost		—			—			664			703
Interest cost		1,733			1,751			486			614
Actuarial loss		3,868			2,024			121			81
Benefit payments		(1,651	)		(1,504	)		—			(1,041	)
Settlements		—			—			(1,596	)		(1,626	)
Foreign currency		—			—			2,755			603

Projected benefit obligation at end of year	$	49,220		$	45,270		$	38,136		$	35,706

Change in Plan Assets:
Fair value of plan assets at beginning of year	$	18,510		$	13,516		$	19,011		$	9,232
Actual return on plan assets		949			751			183			131
Company contributions		1,856			5,747			1,259			11,120
Expenses and benefits paid from plan assets		(1,651	)		(1,504	)		—			—
Settlements		—			—			(1,596	)		(1,626	)
Foreign currency		—			—			1,467			154

Fair value of plan assets at end of year ⁽¹⁾	$	19,664		$	18,510		$	20,324		$	19,011

Funded Status:
Funded status of plan	$	(29,557	)	$	(26,760	)	$	(17,812	)	$	(16,695	)
Unrecognized actuarial loss (gain)		13,981			10,720			(1,857	)		(2,038	)

Net amount recognized	$	(15,576	)	$	(16,040	)	$	(19,669	)	$	(18,733	)

(1)

In addition to the U.S. pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Executive Chairman and certain executive officers of $25.4 million as of December 31, 2017 and $21.2 million as of December 31, 2016, and are included in Investments on the Consolidated Balance Sheets.

Schedule of Amounts Recognized in Statement of Financial Position

Amounts recognized in the statement of financial position consist of (in thousands):


	U.S. Pension Plans						Non-U.S. Pension Plans
	2017			2016			2017			2016
Current liabilities	$	(17,670	)	$	(399	)	$	—		$	—
Noncurrent liabilities		(11,887	)		(26,361	)		(17,812	)		(16,695	)
Accumulated other comprehensive loss (income) (1)		13,981			10,720			(1,857	)		(2,038	)

Total	$	(15,576	)	$	(16,040	)	$	(19,669	)	$	(18,733	)

(1)	The accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2017 and 2016 is presented net of income tax.

Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows (in thousands):


	U.S. Pension Plans									Non-U.S. Pension Plans
	2017			2016			2015			2017		2016		2015
Net (gain) loss	$	3,814		$	2,068		$	(3,203	)	$	261	$	225	$	813
Amortization of net gain (loss)		(552	)		(544	)		(834	)		78		248		(529	)
Adjustments		—			—			—			—		1,849		—
Foreign currency		—			—			—			—		31		—

Total recognized in other (loss) comprehensive income	$	3,262		$	1,524		$	(4,037	)	$	339	$	2,353	$	284

Schedule of Information for Defined Benefit Plans with Accumulated Benefit Obligations in Excess of Plan Assets

Information for defined benefit plans with accumulated benefit obligations or projected benefit obligation in excess of plan assets as of December 31, 2017 and 2016 is as follows (in thousands):


	U.S. Pension Plans				Non-U.S. Pension Plans
	2017		2016		2017		2016
Accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation	$	49,220	$	45,270	$	29,741	$	27,551
Fair value of plan assets		19,664		18,510		20,324		19,011
Projected benefit obligation in excess of plan assets:
Projected benefit obligation		49,220	$	45,270		38,136		35,706
Fair value of plan assets		19,664		18,510		20,324		19,011

Net Periodic Pension Cost

Net periodic pension cost for 2017, 2016 and 2015 for pension and supplemental benefit plans includes the following components (in thousands):


	U.S. Pension Plans									Non-U.S. Pension Plans
	2017			2016			2015			2017			2016			2015
Service cost	$	—		$	—		$	—		$	664		$	703		$	738
Interest cost		1,733			1,751			1,716			486			614			661
Return on assets (expected)		(895	)		(795	)		(839	)		(323	)		(275	)		(176	)
Amortization of net actuarial loss(gain) ⁽¹⁾		552			544			834			(78	)		(70	)		529
Settlement charge		—			—			—			—			(178	)		—
Adjustments		—			—			—			—			(1,849	)		—
Foreign currency		—			—			—			—			(31	)		—

Net periodic pension cost	$	1,390		$	1,500		$	1,711		$	749		$	(1,086	)	$	1,752

(1)	ARRIS uses the allowable 10% corridor approach to determine the amount of gains/losses subject to amortization in pension cost. Gains/losses are amortized on a straight-line basis over the average future service of members expected to receive benefits

Assumptions Used

The assumptions used to determine the benefit obligations as of December 31, 2017 and 2016 are as set forth below (in percentage):


	U.S. Pension Plans									Non-U.S. Pension Plans
	2017			2016			2015			2017			2016			2015
Weighted-average assumptions used to determine benefit obligations:
Discount rate		3.45	%		3.90	%		4.15	%		1.10	%		1.30	%		1.70	%
Rate of compensation increase		N/A			N/A			N/A			N/A			N/A			N/A

Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate		3.90	%		4.15	%		3.75	%		1.30	%		1.70	%		1.90	%
Expected long-term rate of return on plan assets		5.00	%		6.00	%		6.00	%		1.40	%		1.60	%		2.00	%
Rate of compensation increase (1)		N/A			N/A			N/A			3.00	%		3.00	%		3.00	%

(1)	Represent an average rate for the non-U.S. pension plans. Rate of compensation increase is 4.00% for indirect labor and 2.00% for direct labor for 2017, 2016 and 2015.

Expected Benefit Payments Related to Defined Benefit Pension Plans

As of December 31, 2017, the expected benefit payments related to the Company’s defined benefit pension plans during the next ten years are as follows (in thousands):


	U.S. Pension Plans		Non-U.S. Pension Plans
2018	$	18,890	$	2,840
2019		1,770		2,122
2020		1,820		2,169
2021		1,920		2,273
2022		1,920		1,905
2023 — 2027		10,200		10,737

Summary of Weighted Average Pension Asset Allocations

The following table summarizes the weighted average pension asset allocations as December 31, 2017 and 2016:


	U.S. Pension Plans
	Target				Actual
	2017		2016		2017			2016
Equity securities		—		30% - 40%		—			30	%
Debt securities		—		0% - 5%		—			2	%
Cash and cash equivalents		80% - 100%		60% - 70%		100	%		68	%

Schedule of Pension Plan Assets by Category and by level

The following table summarizes the Company’s U.S. pension plan assets by category and by level (as described in Note 7 Fair Value Measurements of the Notes to the Consolidated Financial Statements) as of December 31, 2017 and 2016 (in thousands):


	December 31, 2017
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents ⁽¹⁾	$	19,662	$	2	$	—	$	19,664

Total	$	19,662	$	2	$	—	$	19,664


	December 31, 2016
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents ⁽¹⁾	$	—	$	12,723	$	—	$	12,723
Equity securities ⁽²⁾:
U.S. large cap		1,123		—		—		1,123
U.S. mid cap		1,118		—		—		1,118
U.S. small cap		1,118		—		—		1,118
International		1,685		—		—		1,685
Fixed income securities ⁽³⁾:		743		—		—		743

Total	$	5,787	$	12,723	$	—	$	18,510

(1)	Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in money market and stable value fund.

(2)	Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held.

(3)	Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held.