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Pension Plans and Other Postretirement Benefits (Tables) | 12 Months Ended
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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 | )

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