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Employee Benefit Plans (Notes)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Disclosure [Text Block] Employee Benefit Plans
Defined Benefit Plans
We have funded and unfunded defined benefit plans covering certain employee groups in the U.S. and various European countries. Local statutory requirements govern many of our European plans. The defined benefit plans are mostly closed to new participants and, in some cases, existing participants no longer accrue benefits.
On June 28, 2019, we approved an amendment to terminate our primary defined benefit plan in the U.S. (the "U.S. Plan") and freeze all related benefit accruals, effective June 30, 2019. The distribution of the U.S. Plan assets pursuant to the termination will not be made until the plan termination satisfies all regulatory requirements, which is expected to be completed in 2020. U.S. Plan participants will receive their full accrued benefits from plan assets by electing either lump sum distributions or annuity contracts with a qualifying third party annuity provider. The resulting settlement effect of the U.S. Plan termination will be determined based on prevailing market conditions, the lump sum offer participation rate of eligible participants, the actual lump sum distributions, and annuity purchase rates at the date of distribution. As a result, we are currently unable to reasonably estimate either the timing or the final amount of such settlement charges. Based on the valuation performed as of December 31, 2019, the U.S. Plan has an underfunded status of $8 million.
Funded Status
The table below summarizes the funded status of our defined benefit plans (in thousands):
 
December 31,
 
2019
 
2018
Change in projected benefit obligation:
 
 
 
Projected benefit obligation - beginning of year
$
201,492

 
$
126,031

Acquisitions (1)
2,071

 
79,211

Service cost
3,592

 
3,215

Interest cost
4,077

 
3,476

Participant contributions
408

 
415

Actuarial (gain) / loss
32,018

 
(989
)
Benefits paid (2)
(6,849
)
 
(4,447
)
Curtailment
(6
)
 
—

Settlement (3)
(8,493
)
 
(756
)
Currency impact
(2,922
)
 
(4,664
)
Projected benefit obligation - end of year
$
225,388

 
$
201,492

Change in fair value of plan assets:
 
 
 
Fair value - beginning of year
$
91,672

 
$
82,852

Acquisitions (1)
—

 
251

Actual return on plan assets
2,558

 
3,018

Employer contributions
4,740

 
9,975

Participant contributions
408

 
415

Benefits paid
(6,770
)
 
(2,788
)
Settlement (3)
(8,493
)
 
—

Currency impact
(810
)
 
(2,051
)
Fair value - end of year
$
83,305

 
$
91,672

Funded status at end of year (liability)
$
(142,083
)
 
$
(109,820
)
 
 
 
 
Accumulated benefit obligation
$
222,607

 
$
199,337


(1)
2018 amounts relate primarily to the addition of plans in connection with our acquisition of Stahlgruber.
(2)
Includes amounts paid from plan assets as well as amounts paid from Company assets.
(3)
During 2019, settlement accounting was triggered for three of our European pension plans resulting in a net gain of less than $1 million recognized in Interest income and other income, net in our Consolidated Statements of Income.
The net amounts recognized for defined benefit plans in the Consolidated Balance Sheets were as follows (in thousands):
 
December 31,
 
2019
 
2018
Non-current assets
$
—

 
$
377

Current liabilities
(11,754
)
 
(3,280
)
Non-current liabilities
(130,329
)
 
(106,917
)
 
$
(142,083
)
 
$
(109,820
)

The following table summarizes the accumulated benefit obligation and aggregate fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets (in thousands):
 
December 31,
 
2019
 
2018
Accumulated benefit obligation
$
222,607

 
$
169,097

Aggregate fair value of plan assets
83,305

 
60,988


The following table summarizes the projected benefit obligation and aggregate fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets (in thousands):
 
December 31,
 
2019
 
2018
Projected benefit obligation
$
225,388

 
$
171,185

Aggregate fair value of plan assets
83,305

 
60,988


The table below summarizes the weighted-average assumptions used to calculate the year-end benefit obligations:
 
2019
 
2018
Discount rate used to determine benefit obligation
1.4
%
 
2.1
%
Rate of future compensation increase
1.7
%
 
0.9
%

Net Periodic Benefit Cost
The table below summarizes the components of net periodic benefit cost for our defined benefit plans (in thousands):
 
Year Ended
 
December 31,
 
2019
 
2018
 
2017
Service cost
$
3,592

 
$
3,215

 
$
4,525

Interest cost
4,077

 
3,476

 
3,670

Expected return on plan assets (1)
(2,337
)
 
(2,949
)
 
(2,467
)
Amortization of prior service credit
—

 
—

 
(181
)
Amortization of actuarial (gain) loss (2)
(404
)
 
(54
)
 
473

Curtailment gain
—

 
—

 
(3,811
)
Settlement (gain) / loss
(378
)
 
74

 
(4
)
Net periodic benefit cost
$
4,550

 
$
3,762

 
$
2,205


(1)
We use the fair value of our plan assets to calculate the expected return on plan assets.
(2)
Actuarial gains and losses are amortized using a corridor approach. Gains and losses are amortized if, as of the beginning of the year, the cumulative net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the fair value of the plan assets. Gains and losses in excess of the corridor are amortized over the average remaining service period of active members expected to receive benefits under the plan or, in the case of closed plans, the expected future lifetime of the employees participating in the plan.
For the years ended December 31, 2019, 2018 and 2017, the service cost component of net periodic benefit cost was classified in Selling, general and administrative expenses, while the other components of net periodic benefit cost were classified in Interest income and other income, net in our Consolidated Statements of Income.
The table below summarizes the weighted-average assumptions used to calculate the net periodic benefit cost in the table above:
 
2019
 
2018
 
2017
Discount rate used to determine service cost
1.3
%
 
1.3
%
 
1.5
%
Discount rate used to determine interest cost
2.5
%
 
2.5
%
 
3.0
%
Rate of future compensation increase
1.8
%
 
1.9
%
 
1.3
%
Expected long-term return on plan assets (1)
3.1
%
 
4.8
%
 
5.0
%

(1)
Our expected long-term return on plan assets is determined based on our asset allocation and estimate of future long-term returns by asset class.
Assumed mortality is also a key assumption in determining benefit obligations and net periodic benefit cost. In some of our European plans, a price inflation index is also an assumption in determining benefit obligations and net periodic benefit cost.
As of December 31, 2019, the pre-tax amounts recognized in Accumulated other comprehensive income consisted of $42 million of net actuarial losses for our defined benefit plans that have not yet been recognized in net periodic benefit cost. Of this amount, we expect $1 million to be recognized as a component of net periodic benefit cost during the year ending December 31, 2020.
Fair Value of Plan Assets    
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Investments that are valued using net asset value ("NAV") (or its equivalent) as a practical expedient are excluded from the fair value hierarchy disclosure.
The following is a description of the valuation methodologies used for assets reported at fair value. The methodologies used at December 31, 2019 and December 31, 2018 are the same.
Level 1 investments: Cash and cash equivalents are valued based on cost, which approximates fair value. Short-term investments are valued initially at cost and adjusted for amortization of any discount or premium. U.S. Bond funds are priced by industry vendors such as Intercontinental Exchange (ICE) Data Services using benchmark yields, reported trades, issuer spreads, and broker/dealer quotes.
Level 3 investments: Investments in insurance contracts represent the cash surrender value of the insurance policy. These are actuarially determined amounts based on projections of future benefit payments, discount rates, and expected long-term rate of return on assets.
The remaining pension assets are valued at net asset value based on the underlying assets owned by the fund administrator, minus liabilities, divided by the number of units outstanding and are included in the table below to reconcile the total investment fair value of our plan assets.
For our unfunded pension plans, the Company pays the defined benefit plan obligations when they become due. The table below summarizes the fair value of our defined benefit plan assets by asset category within the fair value hierarchy for our funded defined benefit pension plans (in thousands):
 
December 31,
 
2019
 
2018
 
Level 1
 
Level 2
 
Level 3
 
NAV
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash-equivalents (1)
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
30,684

 
$
—

 
$
—

 
$
30,684

Short-term investments
433

 
—

 
—

 
—

 
433

 
—

 
—

 
—

 
—

U.S. Bonds (2)
29,035

 
—

 
—

 
—

 
29,035

 
—

 
—

 
—

 
—

Insurance contracts
—

 
—

 
40,676

 
—

 
40,676

 
—

 
—

 
60,988

 
60,988

Mutual fund (3)
—

 
—

 
—

 
13,161

 
13,161

 
$
—

 
$
—

 
$
—

 
—

Total investments at fair value
$
29,468

 
$
—

 
$
40,676

 
$
13,161

 
$
83,305

 
$
30,684

 
$
—

 
$
60,988

 
$
91,672


(1)
Consists of institutional short-term investment funds.
(2)
Consists primarily of U.S. Treasury notes with readily available pricing data.
(3)
The underlying assets of the mutual fund valued at NAV consist of international bonds, equity, real estate and other investments.
The following table summarizes the changes in fair value measurements of Level 3 investments for our defined benefit plans (in thousands):
 
December 31,
 
2019
 
2018
Balance at beginning of year
$
60,988

 
$
60,774

Actual return on plan assets:
 
 
 
Relating to assets held at the reporting date
1,424

 
2,556

Purchases, sales and settlements
(1,181
)
 
(541
)
Transfers in and/or out of Level 3
(19,640
)
 
255

Currency impact
(915
)
 
(2,056
)
Balance at end of year
$
40,676

 
$
60,988


Assets for our defined benefit pension plans in Europe are invested primarily in insurance policies. Under these contracts, we pay premiums to the insurance company, which are based on an internal actuarial analysis performed by the insurance company; the insurance company then funds the pension payments to the plan participants upon retirement. In 2019, we changed our funding for one of our European plans from insurance contracts to a direct investment in a mutual fund which is invested in various international bond, equity, real estate and other investments. The assets for our U.S. plan are managed by a master trust, with oversight responsibility by our Benefits Committee. During 2019, we engaged an investment advisor to help minimize the volatility in our funded status as we began the process of terminating our U.S. Plan. As a result, we updated our investment strategy such that as of December 31, 2019 our U.S. Plan assets reside primarily in U.S. Bonds, with a smaller allocation of assets in short-term investments. The new investment policy and allocation of the assets was approved by our Benefits Committee.
Employer Contributions and Estimated Future Benefit Payments    
During the year ended December 31, 2019, we contributed $5 million to our pension plans. We estimate that contributions to our pension plans during 2020 will be $13 million.
The following table summarizes estimated future benefit payments as of December 31, 2019 (in thousands):
Year Ended December 31,
 
Amount
2020 (1)
 
$
43,446

2021
 
4,357

2022
 
4,890

2023
 
5,003

2024
 
5,474

2025 - 2029
 
29,946


(1) This amount includes the gross benefit payments expected to be paid to settle the U.S. Plan, exclusive of plan assets.