XML 56 R50.htm IDEA: XBRL DOCUMENT v2.4.1.9
Pension Plans and Other Postretirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2014
Financial Assets Accounted for at Fair Value on Recurring Basis
The following table sets forth the assets of our pension and postretirement plans that were accounted for at fair value on a recurring basis as of December 31, 2014 (in thousands):
 
December 31, 2014
 
Quoted Prices in Active Markets for Identical Items (Level 1)
 
Quoted Prices in Active Markets for Similar Items (Level 2)
 
Unobservable Inputs (Level 3)
Pension Assets:
 
 
 
 
 
 
 
Domestic Equity(a)
$
169,581

 
$
169,581

 
$
—

 
$
—

International Equity(b)
85,007

 
85,007

 
—

 
—

Fixed Income(c)
268,911

 
255,828

 
13,083

 
—

Absolute Return(d)
80,740

 
—

 
—

 
80,740

Cash
3,455

 
3,455

 
—

 
—

Total Pension Assets
$
607,694

 
$
513,871

 
$
13,083

 
$
80,740

Postretirement Assets:
 
 
 
 
 
 
 
Fixed Income(c)
$
4,439

 
$
—

 
$
4,439

 
$
—


(a)
Consists primarily of U.S. stock funds that track or are actively managed and measured against the S&P 500 index.
(b)
Consists primarily of international equity funds which invest in common stocks and other securities whose value is based on an international equity index or an underlying equity security or basket of equity securities.
(c)
Consists primarily of debt obligations issued by governments, corporations, municipalities and other borrowers. Also includes insurance policies.
(d)
Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below.
The following table sets forth the assets of our pension and postretirement plans that were accounted for at fair value on a recurring basis as of December 31, 2013 (in thousands):
 
December 31, 2013
 
Quoted Prices in Active Markets for Identical Items (Level 1)
 
Quoted Prices in Active Markets for Similar Items (Level 2)
 
Unobservable Inputs (Level 3)
Pension Assets:
 
 
 
 
 
 
 
Domestic Equity(a)
$
167,627

 
$
167,627

 
$
—

 
$
—

International Equity(b)
70,609

 
70,609

 
—

 
—

Fixed Income(c)
248,095

 
237,151

 
10,944

 
—

Absolute Return(d)
125,137

 
1,538

 
—

 
123,599

Cash
5,077

 
5,077

 
—

 
—

Total Pension Assets
$
616,545

 
$
482,002

 
$
10,944

 
$
123,599

Postretirement Assets:
 
 
 
 
 
 
 
Fixed Income(c)
$
5,620

 
$
—

 
$
5,620

 
$
—

(a)
Consists primarily of U.S. stock funds that track or are actively managed and measured against the S&P 500 index.
(b)
Consists primarily of an international equity fund which invests in common stocks and other securities whose value is based on an international equity index or an underlying equity security or basket of equity securities.
(c)
Consists primarily of mutual funds that hold debt obligations issued by governments, corporations, municipalities and other borrowers. Also includes insurance policies.
(d)
Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below.
Changes in Fair Value of Plans Level 3 Assets
The table below sets forth a summary of changes in the fair value of the plans’ Level 3 assets for the year ended December 31, 2014 (in thousands):
Absolute Return:
Year Ended December 31, 2014
Beginning Balance
$
123,599

Total losses relating to assets sold during the period(a)
(10,112
)
Total unrealized gains relating to assets still held at the reporting date(a)
13,144

Purchases
50,506

Sales
(96,397
)
Ending Balance
$
80,740


(a)
These (losses) gains are recognized in the consolidated balance sheets and are included as changes in plan assets in the tables above.
The table below sets forth a summary of changes in the fair value of the plans’ Level 3 assets for the year ended December 31, 2013 (in thousands):

Absolute Return:
Year Ended December 31, 2013
Beginning Balance
$
70,829

Total gains relating to assets sold during the period(a)
994

Total unrealized losses relating to assets still held at the reporting date(a)
(4,511
)
Purchases
76,643

Sales
(20,356
)
Ending Balance
$
123,599


(a)
These gains (losses) are recognized in the consolidated balance sheets and are included as changes in plan assets in the tables above.
Current Forecast of Benefit Payments, which Reflect Expected Future Service
The current forecast of benefit payments, which reflect expected future service, amounts to (in millions):
 
Total Pension Benefits
 
Domestic Pension Benefits
 
Total Postretirement Benefits
2015
$
41.6

 
$
40.1

 
$
5.0

2016
$
40.6

 
$
39.1

 
$
4.9

2017
$
42.5

 
$
40.1

 
$
4.6

2018
$
45.2

 
$
43.8

 
$
4.4

2019
$
43.4

 
$
41.9

 
$
4.2

2020-2024
$
230.8

 
$
216.7

 
$
19.1
Total Pension Benefits  
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Plans
The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans, as well as a summary of significant assumptions for our pension benefit plans (in thousands):
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
 
Total Pension Benefits
 
Domestic Pension Benefits
 
Total Pension Benefits
 
Domestic Pension Benefits
Change in benefit obligations:
 
 
 
 
 
 
 
Benefit obligation at January 1
$
678,582

 
$
629,337

 
$
762,395

 
$
714,158

Service cost
8,775

 
7,029

 
13,962

 
12,177

Interest cost
32,062

 
30,491

 
29,883

 
28,406

Actuarial loss (gain)
141,228

 
130,887

 
(88,392
)
 
(85,774
)
Benefits paid
(41,779
)
 
(37,866
)
 
(41,132
)
 
(39,630
)
Divestitures(a)
(30,226
)
 
(30,226
)
 
—

 
—

Employee contributions
283

 
—

 
320

 
—

Foreign exchange (gain) loss
(6,161
)
 
—

 
1,546

 
—

Benefit obligation at December 31
$
782,764

 
$
729,652

 
$
678,582

 
$
629,337

 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
616,545

 
$
605,604

 
$
563,303

 
$
554,179

Actual return on plan assets
54,195

 
53,696

 
83,853

 
83,499

Employer contributions
9,982

 
7,042

 
9,790

 
7,556

Benefits paid
(41,779
)
 
(37,866
)
 
(41,132
)
 
(39,630
)
Divestitures(a)
(30,226
)
 
(30,226
)
 
—

 
—

Employee contributions
283

 
—

 
320

 
—

Foreign exchange (loss) gain
(1,306
)
 
—

 
411

 
—

Fair value of plan assets at December 31
$
607,694

 
$
598,250

 
$
616,545

 
$
605,604

 
 
 
 
 
 
 
 
Funded status at December 31
$
(175,070
)
 
$
(131,402
)
 
$
(62,037
)
 
$
(23,733
)

(a)
Reduction in benefit obligations and plan assets is in connection with the sale of our antioxidant, ibuprofen and propofol businesses and assets which closed on September 1, 2014. See Note 2 “Discontinued Operations” for additional information about this transaction.

 
December 31, 2014
 
December 31, 2013
 
Total Pension Benefits
 
Domestic Pension Benefits
 
Total Pension Benefits
 
Domestic Pension Benefits
Amounts recognized in consolidated balance sheets:
 
 
 
 
 
 
 
Current liabilities (accrued expenses)
$
(4,535
)
 
$
(3,219
)
 
$
(4,390
)
 
$
(2,856
)
Noncurrent liabilities (pension benefits)
(170,534
)
 
(128,183
)
 
(57,647
)
 
(20,877
)
Net pension liability
$
(175,069
)
 
$
(131,402
)
 
$
(62,037
)
 
$
(23,733
)
 
 
 
 
 
 
 
 
Amounts recognized in accumulated other comprehensive (loss) income:
 
 
 
 
 
 
 
Prior service benefit
$
(607
)
 
$
(286
)
 
$
70

 
$
441

Net amount recognized
$
(607
)
 
$
(286
)
 
$
70

 
$
441

 
 
 
 
 
 
 
 
Weighted-average assumption percentages:
 
 
 
 
 
 
 
Discount rate
4.03
%
 
4.19
%
 
5.00
%
 
5.14
%
Rate of compensation increase
3.40
%
 
—
%
 
2.78
%
 
3.50
%
Components of Pension Benefits Expense
The components of pension benefits cost (credit) are as follows (in thousands):
 
Year Ended
 
Year Ended
 
Year Ended
 
December 31, 2014
 
December 31, 2013
 
December 31, 2012
 
Total Pension Benefits
 
Domestic Pension Benefits
 
Total Pension Benefits
 
Domestic Pension Benefits
 
Total Pension Benefits
 
Domestic Pension Benefits
Service cost
$
8,775

 
$
7,029

 
$
13,962

 
$
12,177

 
$
12,741

 
$
11,274

Interest cost
32,062

 
30,491

 
29,883

 
28,406

 
31,636

 
29,843

Expected return on assets
(40,141
)
 
(39,714
)
 
(39,392
)
 
(38,975
)
 
(44,752
)
 
(44,342
)
Actuarial loss (gain)(a)
126,975

 
116,705

 
(132,916
)
 
(130,297
)
 
72,550

 
65,603

Amortization of prior service benefit
(677
)
 
(727
)
 
(689
)
 
(741
)
 
(757
)
 
(812
)
Total net pension benefits cost (credit)
$
126,994

 
$
113,784

 
$
(129,152
)
 
$
(129,430
)
 
$
71,418

 
$
61,566

 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumption percentages:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
5.00
%
 
5.14
%
 
4.04
%
 
4.10
%
 
5.04
%
 
5.07
%
Expected return on plan assets
6.86
%
 
6.91
%
 
7.20
%
 
7.25
%
 
8.19
%
 
8.25
%
Rate of compensation increase
2.78
%
 
3.50
%
 
3.37
%
 
3.50
%
 
3.96
%
 
4.11
%


(a)
In the second quarter of 2013, we identified that our consolidated statement of income for the year ended December 31, 2012 included a correction of $5.8 million (recorded in the second quarter of 2012) for pension plan actuarial gains that related to 2011. This amount was deemed to be not material with respect to our financial statements for the year ended December 31, 2012 and any prior period financial statements.

Estimated Amounts to Be Amortized from Accumulated Other Comprehensive Income
The estimated amounts to be amortized from accumulated other comprehensive loss into net periodic pension costs during 2015 are as follows (in thousands):
 
Total Pension Benefits
 
Domestic Pension Benefits
Amortization of prior service benefit
$
126

 
$
75
Total Postretirement Benefits  
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Plans
The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans, as well as a summary of significant assumptions for our postretirement benefit plans (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
Total Other Postretirement Benefits
 
Total Other Postretirement Benefits
Change in benefit obligations:
 
 
 
Benefit obligation at January 1
$
62,832

 
$
70,787

Service cost
216

 
309

Interest cost
3,040

 
2,764

Actuarial loss (gain)
3,741

 
(6,165
)
Benefits paid
(5,329
)
 
(4,863
)
Benefit obligation at December 31
$
64,500

 
$
62,832

 
 
 
 
Change in plan assets:
 
 
 
Fair value of plan assets at January 1
$
5,620

 
$
6,611

Actual return on plan assets
214

 
368

Employer contributions
3,934

 
3,504

Benefits paid
(5,329
)
 
(4,863
)
Fair value of plan assets at December 31
$
4,439

 
$
5,620

 
 
 
 
Funded status at December 31
$
(60,061
)
 
$
(57,212
)

 
December 31,
 
2014
 
2013
 
Total Other Postretirement Benefits
 
Total Other Postretirement Benefits
Amounts recognized in consolidated balance sheets:
 
 
 
Current liabilities (accrued expenses)
$
(3,637
)
 
$
(3,309
)
Noncurrent liabilities (postretirement benefits)
(56,424
)
 
(53,903
)
Net postretirement liability
$
(60,061
)
 
$
(57,212
)
 
 
 
 
Amounts recognized in accumulated other comprehensive (loss) income:
 
 
 
Prior service benefit
$
334

 
$
429

Net amount recognized
$
334

 
$
429

 
 
 
 
Weighted-average assumption percentages:
 
 
 
Discount rate
4.15
%
 
5.03
%
Rate of compensation increase
3.50
%
 
3.50
%
Components of Pension Benefits Expense
The components of postretirement benefits cost (credit) are as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
 
Total Other Postretirement Benefits
 
Total Other Postretirement Benefits
 
Total Other Postretirement Benefits
Service cost
$
216

 
$
309

 
$
274

Interest cost
3,040

 
2,764

 
3,172

Expected return on assets
(342
)
 
(413
)
 
(488
)
Actuarial loss (gain)(a)
3,868

 
(6,120
)
 
3,161

Amortization of prior service benefit
(95
)
 
(95
)
 
(95
)
Total net postretirement benefits cost (credit)
$
6,687

 
$
(3,555
)
 
$
6,024

 
 
 
 
 
 
Weighted-average assumption percentages:
 
 
 
 
 
Discount rate
5.03
%
 
4.00
%
 
5.10
%
Expected return on plan assets
7.00
%
 
7.00
%
 
7.00
%
Rate of compensation increase
3.50
%
 
3.50
%
 
4.00
%


(a)
In the second quarter of 2013, we identified that our consolidated statement of income for the year ended December 31, 2012 included a correction of $4.4 million (recorded in the second quarter of 2012) for postretirement plan actuarial gains that related to 2011. This amount was deemed to be not material with respect to our financial statements for the year ended December 31, 2012 and any prior period financial statements.
Estimated Amounts to Be Amortized from Accumulated Other Comprehensive Income
The estimated amounts to be amortized from accumulated other comprehensive loss into net periodic postretirement costs during 2015 are as follows (in thousands):
 
Total Other Postretirement Benefits
Amortization of prior service benefit
$
(95
)