PENSION AND POSTRETIREMENT BENEFITS

We sponsor several noncontributory defined benefit pension plans, covering substantially all U.S. employees and certain non-U.S. employees, which provide benefits based on years of service, age, job grade levels and type of compensation. Retirement benefits for all other covered employees are provided through contributory pension plans, cash balance pension plans and government-sponsored retirement programs. All funded defined benefit pension plans receive funding based on independent actuarial valuations to provide for current service and an amount sufficient to amortize unfunded prior service over periods not to exceed 30 years, with funding falling within the legal limits prescribed by prevailing regulation. We also maintain unfunded defined benefit plans that, as permitted by local regulations, receive funding only when benefits become due.

Our defined benefit plan strategy is to ensure that current and future benefit obligations are adequately funded in a cost-effective manner. Additionally, our investing objective is to achieve the highest level of investment performance that is compatible with our risk tolerance and prudent investment practices. Because of the long-term nature of our defined benefit plan liabilities, our funding strategy is based on a long-term perspective for formulating and implementing investment policies and evaluating their investment performance.

The asset allocation of our defined benefit plans reflect our decision about the proportion of the investment in equity and fixed income securities, and, where appropriate, the various sub-asset classes of each. At least annually, we complete a comprehensive review of our asset allocation policy and the underlying assumptions, which includes our long-term capital markets rate of return assumptions and our risk tolerances relative to our defined benefit plan liabilities.

The expected rates of return on defined benefit plan assets are derived from review of the asset allocation strategy, expected long-term performance of asset classes, risks and other factors adjusted for our specific investment strategy. These rates are impacted by changes in general market conditions, but because they are long-term in nature, short-term market changes do not significantly impact the rates.

Our U.S. defined benefit plan assets consist of a balanced portfolio of primarily U.S. equity and fixed income securities. Our non-U.S. defined benefit plan assets include a significant concentration of United Kingdom ("U.K.") fixed income securities. We monitor investment allocations and manage plan assets to maintain acceptable levels of risk. In addition, certain of our defined benefit plans hold investments in European equity and fixed income securities.

For all periods presented, we used a measurement date of December 31 for each of our U.S. and non-U.S. pension plans and postretirement medical plans.

U.S. Defined Benefit Plans

We maintain qualified and non-qualified defined benefit pension plans in the U.S. The qualified plan provides coverage for substantially all full-time U.S. employees who receive benefits, up to an earnings threshold specified by the U.S. Department of Labor. The non-qualified plans primarily cover a small number of employees including current and former members of senior management, providing them with benefit levels equivalent to other participants, but that are otherwise limited by U.S. Department of Labor rules. The U.S. plans are designed to operate as "cash balance" arrangements, under which the employee has the option to take a lump sum payment at the end of their service. The total accumulated benefit obligation is equivalent to the total projected benefit obligation ("Benefit Obligation").

The following are assumptions related to the U.S. defined benefit pension plans:



	Year Ended December 31,
	2014		2013		2012
Weighted average assumptions used to determine Benefit Obligations:
Discount rate	4.00	%	4.50	%	3.75	%
Rate of increase in compensation levels	4.25		4.25		4.25
Weighted average assumptions used to determine net pension expense:
Long-term rate of return on assets	6.00	%	6.00	%	6.25	%
Discount rate	4.50		3.75		4.50
Rate of increase in compensation levels	4.25		4.25		4.25

At December 31, 2014 as compared with December 31, 2013, we decreased our discount rate from 4.50% to 4.00% based on an analysis of publicly-traded investment grade U.S. corporate bonds, which had a lower yield due to current market conditions. At December 31, 2014, as compared with December 31, 2013, our average assumed rate of compensation increase remained constant at 4.25%. In determining 2014 expense, the expected rate of return on U.S. plan assets remained constant at 6.00%, primarily based on our target allocations and expected long-term asset returns. The long-term rate of return assumption is calculated using a quantitative approach that utilizes unadjusted historical returns and asset allocation as inputs for the calculation. For all US plans, we adopted the RP-2014 mortality tables and the MP-2014 improvement scale published in October 2014. We applied the RP-2014 tables based on the constituency of our plan population for union and non-union participants. We adjusted the improvement scale to utilize 75% of the ultimate improvement rate, consistent with assumptions adopted by the Social Security Administration trustees, based on long-term historical experience. Currently, we believe this approach provides the best estimate of our future obligation. Most plan participants elect to receive plan benefits as a lump sum at the end of service, rather than an annuity. As such, the updated mortality tables had an immaterial effect on our pension obligation.

Net pension expense for the U.S. defined benefit pension plans (including both qualified and non-qualified plans) was:



	Year Ended December 31,
	2014			2013			2012
	(Amounts in thousands)
Service cost	$	22,981		$	23,355		$	21,222
Interest cost	17,429			15,089			16,458
Expected return on plan assets	(21,985		)	(19,952		)	(21,153		)
Settlement and curtailment of benefits	—			(28		)	—
Amortization of unrecognized prior service benefit	475			(87		)	(1,238		)
Amortization of unrecognized net loss	8,428			14,280			12,177
U.S. net pension expense	$	27,328		$	32,657		$	27,466

The estimated prior service cost and the estimated net loss for the U.S. defined benefit pension plans that will be amortized from accumulated other comprehensive loss into pension expense in 2015 is $0.5 million and $9.0 million, respectively. We amortize estimated prior service benefits and estimated net losses over the remaining expected service period.

The following summarizes the net pension (liability) asset for U.S. plans:



	December 31,
	2014			2013
	(Amounts in thousands)
Plan assets, at fair value	$	426,784		$	410,462
Benefit Obligation	(447,552		)	(405,812		)
Funded status	$	(20,768	)	$	4,650

The following summarizes amounts recognized in the balance sheet for U.S. plans:



	December 31,
	2014			2013
	(Amounts in thousands)
Noncurrent assets	$	—		$	14,355
Current liabilities	(260		)	(500		)
Noncurrent liabilities	(20,508		)	(9,205		)
Funded status	$	(20,768	)	$	4,650

The following is a summary of the changes in the U.S. defined benefit plans’ pension obligations:



	2014			2013
	(Amounts in thousands)
Balance — January 1	$	405,812		$	423,547
Service cost	22,981			23,355
Interest cost	17,429			15,089
Plan amendments	2,387			—
Actuarial loss (gain)(1)	32,425			(22,356		)
Benefits paid	(33,482		)	(33,823		)
Balance — December 31	$	447,552		$	405,812
Accumulated benefit obligations at December 31	$	447,552		$	405,812

_______________________________________


(1)	The 2014 actuarial loss primarily reflects the impact of decrease in the discount rate.

The following table summarizes the expected cash benefit payments for the U.S. defined benefit pension plans in the future (amounts in millions):



2015	$	36.6
2016	37.4
2017	37.9
2018	39.9
2019	40.5
2020-2024	215.8

The following table shows the change in accumulated other comprehensive loss attributable to the components of the net cost and the change in Benefit Obligations for U.S. plans, net of tax:



	2014			2013			2012
	(Amounts in thousands)
Balance — January 1	$	(55,110	)	$	(90,270	)	$	(98,745	)
Amortization of net loss	5,277			8,919			7,605
Amortization of prior service cost (benefit)	297			(54		)	(773		)
Net (loss) gain arising during the year	(17,367		)	26,312			1,643
Settlement gain	—			(17		)	—
Balance — December 31	$	(66,903	)	$	(55,110	)	$	(90,270	)

Amounts recorded in accumulated other comprehensive loss consist of:



	December 31,
	2014			2013
	(Amounts in thousands)
Unrecognized net loss	$	(64,970	)	$	(54,391	)
Unrecognized prior service cost	(1,933		)	(719		)
Accumulated other comprehensive loss, net of tax	$	(66,903	)	$	(55,110	)

The following is a reconciliation of the U.S. defined benefit pension plans’ assets:



	2014			2013
	(Amounts in thousands)
Balance — January 1	$	410,462		$	380,342
Return on plan assets	29,058			39,749
Company contributions	20,746			24,194
Benefits paid	(33,482		)	(33,823		)
Balance — December 31	$	426,784		$	410,462

We contributed $20.7 million and $24.2 million to the U.S. defined benefit pension plans during 2014 and 2013, respectively. These payments exceeded the minimum funding requirements mandated by the U.S. Department of Labor rules. Our estimated contribution in 2015 is expected to be approximately $20 million, excluding direct benefits paid.

All U.S. defined benefit plan assets are held by the qualified plan. The asset allocations for the qualified plan at the end of 2014 and 2013 by asset category, are as follows:



	Target Allocation at December 31,				Percentage of Actual Plan Assets at December 31,
Asset category	2014		2013		2014		2013
U.S. Large Cap	19	%	19	%	19	%	20	%
U.S. Small Cap	4	%	4	%	4	%	4	%
International Large Cap	14	%	14	%	14	%	14	%
Emerging Markets	5	%	5	%	5	%	5	%
World Equity	8	%	8	%	8	%	8	%
Equity securities	50	%	50	%	50	%	51	%
Liability Driven Investment	40	%	40	%	40	%	39	%
Long-Term Government / Credit	10	%	10	%	10	%	10	%
Fixed income	50	%	50	%	50	%	49	%
Other(1)	0	%	0	%	0	%	0	%

_______________________________________


(1)	Less than 1% of holdings are in the Other category in 2014 and 2013.

None of our common stock is directly held by our qualified plan. Our investment strategy is to earn a long-term rate of return consistent with an acceptable degree of risk and minimize our cash contributions over the life of the plan, while taking into account the liquidity needs of the plan. We preserve capital through diversified investments in high quality securities. Our current allocation target is to invest approximately 50% of plan assets in equity securities and 50% in fixed income securities. Within each investment category, assets are allocated to various investment strategies. A professional money management firm manages our assets, and we engage a consultant to assist in evaluating these activities. We periodically review the allocation target, generally in conjunction with an asset and liability study and in consideration of our future cash flow needs. We regularly rebalance the actual allocation to our target investment allocation.

Plan assets are invested in commingled funds and the individual funds are actively managed with the intent to outperform specified benchmarks. Our "Pension and Investment Committee" is responsible for setting the investment strategy and the target asset allocation, as well as selecting individual funds. As the qualified plan approached fully funded status, we implemented a Liability-Driven Investing ("LDI") strategy, which more closely aligns the duration of the assets with the duration of the liabilities. The LDI strategy results in an asset portfolio that more closely matches the behavior of the liability, thereby protecting the funded status of the plan.

The plan’s financial instruments, shown below, are presented at fair value. See Note 1 for further discussion on how the hierarchical levels of the fair values of the Plan’s investments are determined. Prior period information has been updated to conform to current year presentation. The fair values of our U.S. defined benefit plan assets were:



	At December 31, 2014								At December 31, 2013
			Hierarchical Levels								Hierarchical Levels
	Total		I		II		III		Total		I		II		III
	(Amounts in thousands)								(Amounts in thousands)
Cash and cash equivalents	$	40	$	40	$	—	$	—	$	2,860	$	2,860	$	—	$	—
Commingled Funds:
Equity securities
U.S. Large Cap(a)	82,355		—		82,355		—		81,004		—		81,004		—
U.S. Small Cap(b)	17,422		—		17,422		—		17,136		—		17,136		—
International Large Cap(c)	56,716		—		56,716		—		58,675		—		58,675		—
Emerging Markets(d)	19,175		—		19,175		—		19,772		—		19,772		—
World Equity(e)	34,384		—		34,384		—		34,069		—		34,069		—
Fixed income securities
Liability Driven Investment (f)	172,758		—		172,758		—		157,638		—		157,638		—
Long-Term Government/Credit(g)	43,934		—		43,934		—		39,308		—		39,308		—
	$	426,784	$	40	$	426,744	$	—	$	410,462	$	2,860	$	407,602	$	—

_______________________________________


(a)	U.S. Large Cap funds seek to outperform the Russell 1000 (R) Index with investments in large and medium capitalization U.S. companies represented in the Russell 1000 (R) Index, which is composed of the largest 1,000 U.S. equities as determined by market capitalization.


(b)	U.S. Small Cap funds seek to outperform the Russell 2000 (R) Index with investments in medium and small capitalization U.S. companies represented in the Russell 2000 (R) Index, which is composed of the smallest 2,000 U.S. equities as determined by market capitalization.


(c)	International Large Cap funds seek to outperform the MSCI Europe, Australia, and Far East Index with investments in most of the developed nations of the world so as to maintain a high degree of diversification among countries and currencies.


(d)	Emerging Markets funds represent a diversified portfolio that seeks high, long-term returns comparable to investments in emerging markets by investing in stocks from newly developed emerging market economies.


(e)	World Equity funds seek to outperform the Russell Developed Large Cap Index Net over a full market cycle. The fund's goal is to provide a favorable total return relative to the benchmark, primarily through long-term capital appreciation.


(f)	LDI funds seek to outperform the Barclays-Russell LDI Index by investing in high quality, mostly corporate bonds and fixed income securities that closely match those found in discount curves used to value the plan's liabilities.


(g)	Long-Term Government/Credit funds seek to outperform the Barclays Capital U.S. Long-Term Government/Credit Index by generating excess return through a variety of diversified strategies in securities with longer durations, such as sector rotation, security selection and tactical use of high-yield bonds.

Non-U.S. Defined Benefit Plans

We maintain defined benefit pension plans, which cover some or all of our employees in the following countries: Austria, France, Germany, India, Indonesia, Italy, Japan, Mexico, The Netherlands, Sweden and the U.K. The assets in the U.K. (two plans) and The Netherlands (one plan) represent 97% of the total non-U.S. plan assets ("non-U.S. assets"). Details of other countries’ plan assets have not been provided due to immateriality.

The following are assumptions related to the non-U.S. defined benefit pension plans:



	Year Ended December 31,
	2014		2013		2012
Weighted average assumptions used to determine Benefit Obligations:
Discount rate	3.40	%	4.22	%	4.16	%
Rate of increase in compensation levels	3.95		3.83		3.84
Weighted average assumptions used to determine net pension expense:
Long-term rate of return on assets	5.51	%	5.49	%	5.78	%
Discount rate	4.22		4.16		5.09
Rate of increase in compensation levels	3.83		3.84		3.56

At December 31, 2014 as compared with December 31, 2013, we decreased our average discount rate for non-U.S. plans from 4.22% to 3.40% based on analysis of bonds and other publicly-traded instruments, by country, which had lower yields due to market conditions. To determine 2014 pension expense, we increased our average expected rate of return on plan assets slightly from 5.49% at December 31, 2013 to 5.51% at December 31, 2014, primarily due to asset returns greater than expected during the year. As the expected rate of return on plan assets is long-term in nature, short-term market changes do not significantly impact the rate.

Many of our non-U.S. defined benefit plans are unfunded, as permitted by local regulation. The expected long-term rate of return on assets for funded plans was determined by assessing the rates of return for each asset class and is calculated using a quantitative approach that utilizes unadjusted historical returns and asset allocation as inputs for the calculation. We work with our actuaries to determine the reasonableness of our long-term rate of return assumptions by looking at several factors including historical returns, expected future returns, asset allocation, risks by asset class and other items.

Net pension expense for non-U.S. defined benefit pension plans was:



	Year Ended December 31,
	2014			2013			2012
	(Amounts in thousands)
Service cost	$	6,857		$	6,819		$	4,681
Interest cost	14,576			13,486			13,724
Expected return on plan assets	(10,581		)	(9,200		)	(8,542		)
Amortization of unrecognized net loss	6,962			6,650			4,020
Settlement and other	314			134			43
Non-U.S. net pension expense	$	18,128		$	17,889		$	13,926

The estimated prior service cost and an estimated net loss for the non-U.S. defined benefit pension plans that will be amortized from accumulated other comprehensive loss into pension expense in 2015 is $0.1 million an $5.3 million, respectively. We amortize estimated net losses over the remaining expected service period or over the remaining expected lifetime of inactive participants for plans with only inactive participants.

The following summarizes the net pension liability for non-U.S. plans:



	December 31,
	2014			2013
	(Amounts in thousands)
Plan assets, at fair value	$	215,360		$	195,042
Benefit Obligation	(361,351		)	(363,425		)
Funded status	$	(145,991	)	$	(168,383	)

The following summarizes amounts recognized in the balance sheet for non-U.S. plans:



	December 31,
	2014			2013
\	(Amounts in thousands)
Noncurrent assets	$	5,204		$	52
Current liabilities	(7,960		)	(9,048		)
Noncurrent liabilities	(143,235		)	(159,387		)
Funded status	$	(145,991	)	$	(168,383	)

The following is a reconciliation of the non-U.S. plans’ defined benefit pension obligations:



	2014			2013
	(Amounts in thousands)
Balance — January 1	$	363,425		$	340,348
Service cost	6,857			6,819
Interest cost	14,576			13,486
Employee contributions	272			267
Plan amendments and other	162			1,573
Actuarial loss(1)	28,430			8,664
Net benefits and expenses paid	(17,985		)	(16,491		)
Currency translation impact(2)	(34,386		)	8,759
Balance — December 31	$	361,351		$	363,425
Accumulated benefit obligations at December 31	$	335,282		$	340,223

_______________________________________


(1)	The 2014 actuarial losses primarily reflect the impact of decrease in the discount rates in all countries except for Venezuela.


(2)	The currency translation impact reflects the strengthening of the U.S. dollar against our significant currencies, primarily the Euro and British pound.

The following table summarizes the expected cash benefit payments for the non-U.S. defined benefit plans in the future (amounts in millions):



2015	$	15.2
2016	13.4
2017	13.7
2018	14.7
2019	16.3
2020-2024	92.1

The following table shows the change in accumulated other comprehensive loss attributable to the components of the net cost and the change in Benefit Obligations for non-U.S. plans, net of tax:



	2014			2013			2012
	(Amounts in thousands)
Balance — January 1	$	(78,863	)	$	(76,197	)	$	(43,110	)
Amortization of net loss	5,262			4,999			2,985
Net loss arising during the year	(3,709		)	(6,091		)	(33,692		)
Settlement loss	216			93			100
Prior service benefit arising during the year	141			137			32
Currency translation impact and other	7,355			(1,804		)	(2,512		)
Balance — December 31	$	(69,598	)	$	(78,863	)	$	(76,197	)

Amounts recorded in accumulated other comprehensive loss consist of:



	December 31,
	2014			2013
	(Amounts in thousands)
Unrecognized net loss	$	(69,161	)	$	(77,379	)
Unrecognized prior service cost	(437		)	(1,484		)
Accumulated other comprehensive loss, net of tax	$	(69,598	)	$	(78,863	)

The following is a reconciliation of the non-U.S. plans’ defined benefit pension assets:



	2014			2013
	(Amounts in thousands)
Balance — January 1	$	195,042		$	173,017
Return on plan assets	30,246			10,480
Employee contributions	272			267
Company contributions	22,740			22,695
Currency translation impact and other	(14,955		)	5,074
Net benefits and expenses paid	(17,985		)	(16,491		)
Balance — December 31	$	215,360		$	195,042

Our contributions to non-U.S. defined benefit pension plans in 2015 are expected to be approximately $12 million, excluding direct benefits paid.

The asset allocations for the non-U.S. defined benefit pension plans at the end of 2014 and 2013 are as follows:



	Target Allocation at December 31,				Percentage of Actual Plan Assets at December 31,
Asset category	2014		2013		2014		2013
North American Companies	3	%	3	%	3	%	3	%
U.K. Companies	9	%	10	%	9	%	10	%
European Companies	4	%	4	%	4	%	4	%
Asian Pacific Companies	3	%	3	%	3	%	3	%
Global Equity	8	%	8	%	8	%	8	%
Equity securities	27	%	28	%	27	%	28	%
U.K. Government Gilt Index	30	%	28	%	30	%	28	%
U.K. Corporate Bond Index	22	%	21	%	22	%	21	%
Global Fixed Income Bond	19	%	20	%	19	%	20	%
Fixed income	71	%	69	%	71	%	69	%
Other	2	%	3	%	2	%	3	%

None of our common stock is held directly by these plans. In all cases, our investment strategy for these plans is to earn a long-term rate of return consistent with an acceptable degree of risk and minimize our cash contributions over the life of the plan, while taking into account the liquidity needs of the plan and the legal requirements of the particular country. We preserve capital through diversified investments in high quality securities.

Asset allocation differs by plan based upon the plan’s Benefit Obligation to participants, as well as the results of asset and liability studies that are conducted for each plan and in consideration of our future cash flow needs. Professional money management firms manage plan assets and we engage consultants in the U.K. and The Netherlands to assist in evaluation of these activities. The assets of the U.K. plans are overseen by a group of Trustees who review the investment strategy, asset allocation and fund selection. These assets are passively managed as they are invested in index funds that attempt to match the performance of the specified benchmark index. The assets of The Netherlands plan are independently managed by an outside service provider.

The fair values of the non-U.S. assets were:



	At December 31, 2014								At December 31, 2013
			Hierarchical Levels								Hierarchical Levels
	Total		I		II		III		Total		I		II		III
	(Amounts in thousands)								(Amounts in thousands)
Cash	$	24	$	24	$	—	$	—	$	189	$	189	$	—	$	—
Commingled Funds:
Equity securities
North American Companies(a)	7,155		—		7,155		—		6,459		—		6,459		—
U.K. Companies(b)	18,829		—		18,829		—		19,448		—		19,448		—
European Companies (c)	8,018		—		8,018		—		8,060		—		8,060		—
Asian Pacific Companies(d)	5,367		—		5,367		—		5,613		—		5,613		—
Global Equity(e)	17,120		—		17,120		—		16,046		—		16,046		—
Fixed income securities
U.K. Government Gilt Index(f)	65,161		—		65,161		—		55,078		—		55,078		—
U.K. Corporate Bond Index(g)	47,683		—		47,683		—		40,039		—		40,039		—
Global Fixed Income Bond(h)	40,820		—		40,820		—		38,335		—		38,335		—
Other(i)	5,183		—		—		5,183		5,775		—		—		5,775
	$	215,360	$	24	$	210,153	$	5,183	$	195,042	$	189	$	189,078	$	5,775

_______________________________________


(a)	North American Companies represents U.S. and Canadian large cap equity index funds, which are passively managed and track their respective benchmarks (FTSE All-World USA Index and FTSE All-World Canada Index).


(b)	U.K. Companies represents a U.K. equity index fund, which is passively managed and tracks the FTSE All-Share Index.


(c)	European companies represents a European equity index fund, which is passively managed and tracks the FTSE All-World Developed Europe Ex-U.K. Index.


(d)	Asian Pacific Companies represents Japanese and Pacific Rim equity index funds, which are passively managed and track their respective benchmarks (FTSE All-World Japan Index and FTSE All-World Developed Asia Pacific Ex-Japan Index).


(e)	Global Equity represents actively managed, global equity funds taking a top-down strategic view on the different regions by analyzing companies based on fundamentals, market-driven, thematic and quantitative factors to generate alpha.


(f)	U.K. Government Gilt Index represents U.K. government issued fixed income investments which are passively managed and track the respective benchmarks (FTSE U.K. Gilt Index-Linked Over 5 Years Index, FTSE U.K. Gilt Over 15 Years Index and FTSE U.K. Gilt Index-Linked Over 25 Years Index).


(g)	U.K. Corporate Bond Index represents U.K. corporate bond investments, which are passively managed and track the iBoxx Over 15 years £ Non-Gilt Index.


(h)	Global Fixed Income Bond represents mostly European fixed income investment funds that are actively managed, diversified and primarily invested in traditional government bonds, high-quality corporate bonds, asset backed securities, emerging market debt and high yield corporate bonds.


(i)	Includes assets held by plans outside the U.K. and The Netherlands. Details, including Level III rollforward details, have not been provided due to immateriality.

Defined Benefit Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets

The following summarizes key pension plan information regarding U.S. and non-U.S. plans whose accumulated benefit obligations exceed the fair value of their respective plan assets. The increase in 2014 is primarily due to inclusion of the U.S. Qualified Plan which has a net liability position at December 31, 2014.



	December 31,
	2014		2013
	(Amounts in thousands)
Benefit Obligation	$	619,756	$	367,460
Accumulated benefit obligation	600,017		346,684
Fair value of plan assets	449,141		189,827

Postretirement Medical Plans

We sponsor several defined benefit postretirement medical plans covering certain current retirees and a limited number of future retirees in the U.S. These plans provide for medical and dental benefits and are administered through insurance companies and health maintenance organizations. The plans include participant contributions, deductibles, co-insurance provisions and other limitations and are integrated with Medicare and other group plans. We fund the plans as benefits and health maintenance organization premiums are paid, such that the plans hold no assets in any period presented. Accordingly, we have no investment strategy or targeted allocations for plan assets. Benefits under our postretirement medical plans are not available to new employees or most existing employees.

The following are assumptions related to postretirement benefits:



	Year Ended December 31,
	2014		2013		2012
Weighted average assumptions used to determine Benefit Obligation:
Discount rate	3.75	%	4.00	%	3.25	%
Weighted average assumptions used to determine net expense:
Discount rate	4.00	%	3.25	%	4.25	%

The assumed ranges for the annual rates of increase in medical costs used to determine net expense were 7.5% for both 2014 and 2013 and 8.0% for 2012, with a gradual decrease to 5.0% for 2025 and future years.

Net postretirement benefit income for postretirement medical plans was:



	Year Ended December 31,
	2014			2013			2012
	(Amounts in thousands)
Service cost	$	3		$	6		$	11
Interest cost	1,200			1,066			1,462
Amortization of unrecognized prior service benefit	—			—			(41		)
Amortization of unrecognized net gain	(1,220		)	(1,280		)	(1,542		)
Net postretirement benefit income	$	(17	)	$	(208	)	$	(110	)

The estimated prior service cost expected to be amortized from accumulated other comprehensive loss into U.S. pension expense in 2015 is $0.2 million. The estimated net gain for postretirement medical plans that will be amortized from accumulated other comprehensive loss into U.S. expense in 2015 is $0.6 million.

The following summarizes the accrued postretirement benefits liability for the postretirement medical plans:



	December 31,
	2014			2013
	(Amounts in thousands)
Postretirement Benefit Obligation	$	33,019		$	31,477
Funded status	$	(33,019	)	$	(31,477	)

The following summarizes amounts recognized in the balance sheet for postretirement Benefit Obligation:



	December 31,
	2014			2013
	(Amounts in thousands)
Current liabilities	$	(3,799	)	$	(4,013	)
Noncurrent liabilities	(29,220		)	(27,464		)
Funded status	$	(33,019	)	$	(31,477	)

The following is a reconciliation of the postretirement Benefit Obligation:



	2014			2013
	(Amounts in thousands)
Balance — January 1	$	31,477		$	34,967
Service cost	3			6
Interest cost	1,200			1,066
Employee contributions	901			2,151
Medicare subsidies receivable	453			789
Actuarial loss (gain)	1,779			(857		)
Plan Amendments	2,339			—
Net benefits and expenses paid	(5,133		)	(6,645		)
Balance — December 31	$	33,019		$	31,477

The following presents expected benefit payments for future periods (amounts in millions):



	Expected Payments		Medicare Subsidy
2015	$	3.9	$	0.1
2016	3.7		0.1
2017	3.5		0.1
2018	3.3		0.1
2019	3.0		0.1
2020-2024	11.2		0.5

The following table shows the change in accumulated other comprehensive loss attributable to the components of the net cost and the change in Benefit Obligations for postretirement benefits, net of tax:



	2014			2013			2012
	(Amounts in thousands)
Balance — January 1	$	4,445		$	4,710		$	7,081
Amortization of net gain	(764		)	(800		)	(963		)
Amortization of prior service cost	(1,464		)	—			(26		)
Net gain (loss) arising during the year	(1,114		)	535			(1,382		)
Balance — December 31	$	1,103		$	4,445		$	4,710

Amounts recorded in accumulated other comprehensive loss consist of:



	December 31,
	2014			2013
	(Amounts in thousands)
Unrecognized net gain	$	2,788		$	4,445
Unrecognized prior service cost	(1,685		)	—
Accumulated other comprehensive income, net of tax	$	1,103		$	4,445

We made contributions to the postretirement medical plans to pay benefits of $3.8 million in 2014, $3.7 million in 2013 and $3.8 million in 2012. Because the postretirement medical plans are unfunded, we make contributions as the covered individuals’ claims are approved for payment. Accordingly, contributions during any period are directly correlated to the benefits paid.

Assumed health care cost trend rates have an effect on the amounts reported for the postretirement medical plans. A one-percentage point change in assumed health care cost trend rates would have the following effect on the 2014 reported amounts (in thousands):



	1% Increase		1% Decrease
Effect on postretirement Benefit Obligation	$	245	$	(248	)
Effect on service cost plus interest cost	6		(7		)

Defined Contribution Plans

We sponsor several defined contribution plans covering substantially all U.S. and Canadian employees and certain other non-U.S. employees. Employees may contribute to these plans, and these contributions are matched in varying amounts by us, including opportunities for discretionary matching contributions by us. Defined contribution plan expense was $20.4 million in 2014, $20.0 million in 2013 and $19.3 million in 2012.

Effective January 1, 2013, our common stock was no longer an investment option. Prior to 2013, participants in the U.S. defined contribution plan had the option to invest in our common stock, therefore, the plan assets prior to 2013 included such holdings of our common stock. Participants with existing holdings of our stock on the effective date are able to maintain their holdings until such time as they are reallocated within the plan by the participant or taken as a distribution by the participant.