XML 54 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
Employee Benefit Plans and Other Postretirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract]  
Schedule of Obligations and Funded Status of Defined Benefit Pension and Postretirement Benefit Plans

The following table, which includes only company-sponsored defined benefit and other postretirement benefit plans, reconciles the beginning and ending balances of the projected benefit obligation and the fair value of plan assets. We recognize the unfunded status of these plans on the Consolidated Balance Sheets, and we recognize changes in funded status in the year changes occur through the Consolidated Statements of Comprehensive Income (dollars in millions):

 

 

 

Pension Plans

 

 

Postretirement Plans

 

 

 

Year Ended December 31

 

 

Year Ended December 31

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Change in Benefit Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit obligation at beginning of period

 

$

1,158.4

 

 

$

1,092.5

 

 

$

19.5

 

 

$

21.4

 

Service cost

 

 

23.7

 

 

 

24.5

 

 

 

0.3

 

 

 

0.5

 

Interest cost

 

 

41.6

 

 

 

40.9

 

 

 

0.6

 

 

 

0.6

 

Plan amendments

 

 

17.3

 

 

 

1.8

 

 

 

(0.5

)

 

 

(5.3

)

Actuarial loss (gain) (a)

 

 

99.3

 

 

 

35.3

 

 

 

(2.2

)

 

 

3.7

 

Participant contributions

 

 

—

 

 

 

—

 

 

 

1.3

 

 

 

1.3

 

Benefits paid

 

 

(40.1

)

 

 

(36.6

)

 

 

(2.5

)

 

 

(2.7

)

Benefit obligation at plan year end

 

$

1,300.2

 

 

$

1,158.4

 

 

$

16.5

 

 

$

19.5

 

Accumulated benefit obligation portion of above

 

$

1,237.7

 

 

$

1,116.6

 

 

 

 

 

 

 

 

 

Change in Fair Value of Plan Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan assets at fair value at beginning of period

 

$

830.4

 

 

$

764.4

 

 

$

—

 

 

$

—

 

Actual return on plan assets

 

 

121.0

 

 

 

44.4

 

 

 

—

 

 

 

—

 

Company contributions

 

 

43.5

 

 

 

58.2

 

 

 

1.2

 

 

 

1.4

 

Participant contributions

 

 

—

 

 

 

—

 

 

 

1.3

 

 

 

1.3

 

Benefits paid

 

 

(40.1

)

 

 

(36.6

)

 

 

(2.5

)

 

 

(2.7

)

Fair value of plan assets at plan year end

 

$

954.8

 

 

$

830.4

 

 

$

—

 

 

$

—

 

Underfunded status

 

$

(345.4

)

 

$

(328.0

)

 

$

(16.5

)

 

$

(19.5

)

Amounts Recognized on Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

$

(1.4

)

 

$

(1.3

)

 

$

(1.0

)

 

$

(1.2

)

Noncurrent liabilities

 

 

(344.0

)

 

 

(326.7

)

 

 

(15.5

)

 

 

(18.3

)

Accrued obligation recognized at December 31

 

$

(345.4

)

 

$

(328.0

)

 

$

(16.5

)

 

$

(19.5

)

Amounts Recognized in Accumulated Other

Comprehensive Loss (Income) (Pre-Tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

$

32.7

 

 

$

21.1

 

 

$

(5.3

)

 

$

(5.0

)

Actuarial loss (gain)

 

 

208.5

 

 

 

183.9

 

 

 

(4.0

)

 

 

(1.9

)

Total

 

$

241.2

 

 

$

205.0

 

 

$

(9.3

)

 

$

(6.9

)

 

(a)

The actuarial loss in 2017 was due primarily to a decrease in the weighted average discount rate used to estimate our pension benefit obligations. In 2016, a decrease in the weighted average discount rate used to estimate our pension benefit obligations and changes in mortality assumptions from the Society of Actuaries resulted in an actuarial loss.
Components of Net Periodic Benefit Costs and Other Comprehensive (Income) Loss (Pretax)

The components of net periodic benefit cost and other comprehensive (income) loss (pretax) were as follows (dollars in millions):

 

 

 

Pension Plans

 

 

Postretirement Plans

 

 

 

Year Ended December 31

 

 

Year Ended December 31

 

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

 

2015

 

Service cost

 

$

23.7

 

 

$

24.5

 

 

$

24.0

 

 

$

0.3

 

 

$

0.5

 

 

$

1.7

 

Interest cost

 

 

41.6

 

 

 

40.9

 

 

 

46.2

 

 

 

0.6

 

 

 

0.6

 

 

 

1.2

 

Expected return on plan assets

 

 

(53.9

)

 

 

(49.5

)

 

 

(53.1

)

 

 

—

 

 

 

—

 

 

 

—

 

Net amortization of unrecognized amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service cost (credit)

 

 

5.8

 

 

 

5.7

 

 

 

5.5

 

 

 

(0.2

)

 

 

(0.1

)

 

 

0.1

 

Actuarial loss (gain)

 

 

7.6

 

 

 

5.8

 

 

 

8.7

 

 

 

(0.1

)

 

 

(0.4

)

 

 

0.1

 

Net periodic benefit cost

 

$

24.8

 

 

$

27.4

 

 

$

31.3

 

 

$

0.6

 

 

$

0.6

 

 

$

3.1

 

Changes in plan assets and benefit obligations

   recognized in other comprehensive (income) loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial net loss (gain)

 

$

32.2

 

 

$

40.4

 

 

$

(14.5

)

 

$

(2.2

)

 

$

3.6

 

 

$

(11.4

)

Prior service cost (credit)

 

 

17.4

 

 

 

1.8

 

 

 

3.0

 

 

 

(0.6

)

 

 

(5.3

)

 

 

—

 

Amortization of prior service cost (credit)

 

 

(5.8

)

 

 

(5.7

)

 

 

(5.5

)

 

 

0.2

 

 

 

(0.3

)

 

 

(0.1

)

Amortization of actuarial loss (gain)

 

 

(7.6

)

 

 

(5.8

)

 

 

(8.7

)

 

 

0.1

 

 

 

0.8

 

 

 

(0.1

)

Total recognized in other comprehensive

   loss (income) (a)

 

$

36.2

 

 

$

30.7

 

 

$

(25.7

)

 

$

(2.5

)

 

$

(1.2

)

 

$

(11.6

)

Total recognized in net periodic benefit

   cost and other comprehensive loss (income) (pre-tax)

 

$

61.0

 

 

$

58.1

 

 

$

5.6

 

 

$

(1.9

)

 

$

(0.6

)

 

$

(8.5

)

 

(a)

Accumulated losses in excess of 10% of the greater of the projected benefit obligation or the market-related value of assets will be recognized on a straight-line basis over the average remaining service period of active employees in PCA plans (which is between seven to ten years) and over the average remaining lifetime of inactive participants of Boise plans (which is between 25 and 28 years), to the extent that losses are not offset by gains in subsequent years. The estimated net loss and prior service cost that will be amortized from “Accumulated other comprehensive loss” into net periodic benefit in 2018 is $15.8 million.
Weighted-Average Assumptions Used To Determine Benefit Obligations and Net Periodic Benefit Cost

The following table presents the assumptions used in the measurement of our benefits obligations:

 

 

 

Pension Plans

 

 

Postretirement Plans

 

 

 

December 31

 

 

December 31

 

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

 

2015

 

Weighted-Average Assumptions Used to

   Determine Benefit Obligations at

   December 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

3.66%

 

 

4.24%

 

 

4.51%

 

 

3.55%

 

 

3.91%

 

 

4.35%

 

Rate of compensation increase

 

4.00%

 

 

 

4.00%

 

 

 

4.00%

 

 

N/A

 

 

N/A

 

 

N/A

 

Weighted-Average Assumptions Used to

   Determine Net Periodic Benefit Cost for the

   Years Ended December 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

4.24%

 

 

4.49%

 

 

4.14%

 

 

3.92%

 

 

4.17%

 

 

3.95%

 

Expected return on plan assets

 

6.55%

 

 

6.57%

 

 

6.73%

 

 

N/A

 

 

N/A

 

 

N/A

 

Rate of compensation increase

 

4.00%

 

 

 

4.00%

 

 

 

4.00%

 

 

N/A

 

 

N/A

 

 

N/A

 

 
Assumed Health Care Cost Trend Rates For Postretirement Benefits

Health Care Cost Trend Rate Assumptions. PCA assumed health care cost trend rates for its postretirement benefits plans were as follows:

 

 

 

2017

 

 

2016

 

 

2015

 

Health care cost trend rate assumed for next year

 

7.57%

 

 

7.35%

 

 

7.60%

 

Rate to which the cost trend rate is assumed to decline

   (the ultimate trend rate)

 

4.44%

 

 

4.50%

 

 

4.50%

 

Year that the rate reaches the ultimate trend rate

 

2027

 

 

2025

 

 

2024

 

 
Schedule of Effects of One-Percentage Point Change In Assumed Health Care Cost Trend Rates on Postretirement Benefits

A one-percentage point change in assumed health care cost trend rates would have the following effects on the 2017 postretirement benefit obligation and the 2016 net post retirement benefit cost (dollars in millions):

 

 

 

 

 

 

 

1-Percentage Point Increase

 

 

1-Percentage Point Decrease

 

Effect on postretirement benefit obligation

 

$

0.6

 

 

$

(0.6

)

Effect on net postretirement benefit cost

 

 

0.1

 

 

 

—

 

 
Schedule of Pension Plans' Assets Investment Policies and Strategies

Assets of our pension plans were invested in the following classes of securities at December 31, 2017 and 2016:

 

 

 

Percentage

of Fair Value at December 31,

 

 

 

2017

 

 

2016

 

Fixed income securities

 

 

21

%

 

 

54

%

International equity securities

 

 

6

%

 

 

23

%

Domestic equity securities

 

 

9

%

 

 

21

%

Real estate securities

 

 

—

 

 

 

1

%

Other

 

 

64

%

 

 

1

%

 

Upon completion of the transfer on January 5, 2018, the pension plan assets were invested in the following classes of securities:

 

 

 

Percentage of Fair Value

at January 5, 2018

 

Fixed income securities

 

 

52

%

International equity securities

 

 

28

%

Domestic equity securities

 

 

20

%

 
Schedule of Pension Plans' Assets Fair Value Measured On a Recurring Basis

The following tables set forth, by level within the fair value hierarchy, discussed in Note 2, Summary of Significant Accounting Policies, the pension plan assets, by major asset category, at fair value at December 31, 2017 and 2016 (dollars in millions):

 

 

 

Fair Value Measurements at December 31, 2017

 

Asset Category

 

Quoted Prices in

Active Markets

for Identical

Assets (Level 1)

 

 

Significant

Other

Observable

Inputs (Level 2)

 

 

Significant

Unobservable

Inputs (Level 3)

 

 

Total

 

Cash and short-term investments (a)

 

$

602.4

 

 

$

5.7

 

 

$

—

 

 

$

608.1

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International equities

 

 

56.1

 

 

 

—

 

 

 

—

 

 

 

56.1

 

Fixed income

 

 

95.4

 

 

 

—

 

 

 

—

 

 

 

95.4

 

Common/collective trust funds (b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic equities

 

 

—

 

 

 

84.1

 

 

 

—

 

 

 

84.1

 

International equities

 

 

—

 

 

 

5.6

 

 

 

—

 

 

 

5.6

 

Fixed income

 

 

—

 

 

 

59.8

 

 

 

—

 

 

 

59.8

 

Corporate and government bonds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income

 

 

41.3

 

 

 

—

 

 

 

—

 

 

 

41.3

 

Private equity securities (c)

 

 

—

 

 

 

—

 

 

 

4.2

 

 

 

4.2

 

Total securities at fair value

 

$

795.2

 

 

$

155.2

 

 

$

4.2

 

 

$

954.6

 

Receivables and accrued expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.2

 

Total fair value of plan assets

 

 

 

 

 

 

 

 

 

 

 

 

 

$

954.8

 

 

 

 

Fair Value Measurements at December 31, 2016

 

Asset Category

 

Quoted Prices in

Active Markets

for Identical

Assets (Level 1)

 

 

Significant

Other

Observable

Inputs (Level 2)

 

 

Significant

Unobservable

Inputs (Level 3)

 

 

Total

 

Cash and short-term investments

 

$

—

 

 

$

1.5

 

 

$

—

 

 

$

1.5

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic equities

 

 

65.7

 

 

 

—

 

 

 

—

 

 

 

65.7

 

International equities

 

 

68.7

 

 

 

—

 

 

 

—

 

 

 

68.7

 

Real estate

 

 

9.6

 

 

 

—

 

 

 

—

 

 

 

9.6

 

Fixed income

 

 

108.4

 

 

 

64.8

 

 

 

—

 

 

 

173.2

 

Common/collective trust funds (b):

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic equities

 

 

—

 

 

 

107.9

 

 

 

—

 

 

 

107.9

 

International equities

 

 

—

 

 

 

124.5

 

 

 

—

 

 

 

124.5

 

Fixed income

 

 

—

 

 

 

271.6

 

 

 

—

 

 

 

271.6

 

Private equity securities (c)

 

 

—

 

 

 

—

 

 

 

5.7

 

 

 

5.7

 

Total securities at fair value

 

$

252.4

 

 

$

570.3

 

 

$

5.7

 

 

$

828.4

 

Receivables and accrued expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.0

 

Total fair value of plan assets

 

 

 

 

 

 

 

 

 

 

 

 

 

$

830.4

 

 

(a)

Short-term investments and the Boise pension plan assets classified as cash as of December 31, 2017. The Boise pension plan assets were subsequently allocated to equities and fixed income securities on January 5, 2018 after consolidating with the PCA pension plan assets under one trustee.

(b)

Investments in common/collective trust funds valued using net asset values (NAV) provided by the administrator of the funds. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of units outstanding. While the underlying assets are actively traded on an exchange, the funds are not. There are currently no redemption restrictions on these investments. There are certain funds with one-day redeemable notice.

(c)

Investments in this category are invested in the Pantheon Global Secondary Fund IV, LP. The fund specializes in investments in the private equity secondary market and occasionally directly in private companies to maximize capital growth. Fund investments are carried at fair value as determined quarterly using the market approach to estimate the fair value of private investments. The market approach utilizes prices and other relevant information generated by market transactions, type of security, size of the position, degree of liquidity, restrictions on the disposition, latest round of financing data, current financial position, and operating results, among other factors. In circumstances where fair values are not provided with respect to any of the company's fund investments, the investment advisor will seek to determine the fair value of such investments based on information provided by the general partners or managers of such funds or from other sources. Audited financial statements are provided by fund management annually. Notwithstanding the above, the variety of valuation bases adopted and quality of management data of the ultimate underlying investee companies means that there are inherent difficulties in determining the value of the investments. Amounts realized on the sale of these investments may differ from the calculated values. Boise had originally committed to a $15.0 million investment, with $5.0 million of the commitment unfunded at December 31, 2017.
Summary of Changes in Pension Plans' Level 3 Assets

The following table sets forth a summary of changes in the fair value of the pension plans' Level 3 assets for the year ended December 31, 2017 (dollars in millions):

 

 

 

2017

 

Balance, beginning of year

 

$

5.7

 

Acquisitions

 

 

—

 

Purchases

 

 

—

 

Sales

 

 

(1.5

)

Unrealized gain

 

 

—

 

Balance, end of year

 

$

4.2

 

 
Schedule of Estimated Benefit Payments

The following are estimated benefit payments to be paid to current plan participants by year (dollars in millions). Qualified pension benefit payments are paid from plan assets, while nonqualified pension benefit payments are paid by the Company.

 

 

 

Pension

Plans

 

 

Postretirement

Plans

 

2018

 

$

45.4

 

 

$

1.0

 

2019

 

 

49.3

 

 

 

1.0

 

2020

 

 

53.2

 

 

 

1.0

 

2021

 

 

57.0

 

 

 

0.9

 

2022 - 2025

 

 

407.9

 

 

 

5.4