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DEFINED BENEFIT RETIREMENT PLAN | 12 Months Ended
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Dec. 31, 2016
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] |
DEFINED BENEFIT RETIREMENT PLAN | (18) DEFINED BENEFIT RETIREMENT PLAN Delta Ltd., a wholly-owned subsidiary of the Company, is the sponsor of the Delta Pension Plan ("Plan"). The Plan provides defined benefit retirement income to eligible employees in the United Kingdom. Pension retirement benefits to qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. This Plan has no active employees as members at December 31, 2016. Funded Status The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases (if applicable) and inflation. Plan assets are measured at fair value. Effective with year-end 2015, the Company early adopted the practical expedient accounting guidance that permits an entity to measure defined benefit plan assets and obligations using the month-end closest to the entity's fiscal year-end consistently going forward. The pension plan obligation recorded on the balance sheet as of December 26, 2015 was measured based on the pension plan assets and obligation as of December 31, 2015. Because the pension plan is denominated in British pounds sterling, the Company used exchange rates of $1.492/£ and $1.234/£ to translate the net pension liability into U.S. dollars at December 26, 2015 and December 31, 2016, respectively. The net funded status of $209,470 at December 31, 2016 is recorded as a noncurrent liability. Projected Benefit Obligation and Fair Value of Plan Assets—The accumulated benefit obligation (ABO) is the present value of benefits earned to date, assuming no future compensation growth. As there are no active employees in the plan, the ABO is equal to the PBO. The underfunded ABO represents the difference between the PBO and the fair value of plan assets. Changes in the PBO and fair value of plan assets for the pension plan for the period from December 27, 2014 to December 31, 2015 were as follows:
| Projected Benefit Obligation |  | Plan Assets |  | Funded status
Fair Value at December 27, 2014 | $ | 692,283 |  |  | $ | 542,159 |  |  | $ | (150,124 | )
Employer contributions | — |  |  | 16,500 |  |  |
Interest cost | 24,614 |  |  | — |  |  |
Actual return on plan assets | — |  |  | (306 | ) |  |
Benefits paid | (18,346 | ) |  | (18,346 | ) |  |
Actuarial loss | 28,130 |  |  | — |  |  |
Currency translation | (29,232 | ) |  | (21,881 | ) |  |
Fair Value at December 31, 2015 | $ | 697,449 |  |  | $ | 518,126 |  |  | $ | (179,323 | )
(18) DEFINED BENEFIT RETIREMENT PLAN (Continued) Changes in the PBO and fair value of plan assets for the pension plan for the period from December 31, 2015 to December 31, 2016 were as follows:
| Projected Benefit Obligation |  | Plan Assets |  | Funded status
Fair Value at December 31, 2015 | $ | 697,449 |  |  | $ | 518,126 |  |  | $ | (179,323 | )
Employer contributions | — |  |  | 1,426 |  |  |
Interest cost | 23,496 |  |  | — |  |  |
Actual return on plan assets | — |  |  | 80,538 |  |  |
Benefits paid | (17,792 | ) |  | (17,792 | ) |  |
Actuarial loss | 125,765 |  |  | — |  |  |
Currency translation | (132,781 | ) |  | (95,631 | ) |  |
Fair Value at December 31, 2016 | $ | 696,137 |  |  | $ | 486,667 |  |  | $ | (209,470 | )
Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 31, 2016 and December 26, 2015 consisted of actuarial gains (losses):
Balance December 27, 2014 | $ | (55,953 | )
Actuarial loss | (53,661 | )
Currency translation gain | 2,655 |
Balance December 26, 2015 | (106,959 | )
Actuarial loss | (66,957 | )
Currency translation gain | 17,038 |
Balance December 31, 2016 | $ | (156,878 | )
The estimated amount to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2017 is approximately $2,840. Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at December 31, 2016 and December 31, 2015 were as follows:
Percentages | 2016 |  | 2015
Discount rate | 2.80 | % |  | 3.75 | %
Salary increase | N/A |  |  | N/A |
CPI inflation | 2.25 | % |  | 2.15 | %
RPI inflation | 3.15 | % |  | 3.25 | %
(18) DEFINED BENEFIT RETIREMENT PLAN (Continued) Expense Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to the fair value of plan assets. Differences in actual experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense. The components of the net periodic pension expense for the fiscal years ended December 31, 2016 and December 26, 2015 were as follows:
|  | 2016 |  | 2015
Net Periodic Benefit Cost: |  |  |
Interest cost | 23,496 |  |  | 24,614 |
Expected return on plan assets | (22,986 | ) |  | (25,224 | )
Amortization of actuarial loss | 1,360 |  |  | — |
Net periodic benefit expense (benefit) | $ | 1,870 |  |  | $ | (610 | )
Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2016 and 2015:
Percentages |  | 2016 |  | 2015
Discount rate | 3.75 | % |  | 3.65 | %
Expected return on plan assets | 5.15 | % |  | 5.00 | %
CPI Inflation | 2.15 | % |  | 2.10 | %
RPI Inflation | 3.35 | % |  | 3.20 | %
The discount rate is based on the yields of AA-rated corporate bonds with durational periods similar to that of the pension liabilities. The expected return on plan assets is based on our asset allocation mix and our historical return, taking into account current and expected market conditions. Inflation is based on expected changes in the consumer price index or the retail price index in the U.K. depending on the relevant plan provisions. Cash Contributions The Company completed negotiations with Plan trustees in 2016 regarding annual funding for the Plan. The annual contributions into the Plan are $12,340 (/£10,000) per annum as part of the Plan’s recovery plan, along with a contribution to cover the administrative costs of the Plan of approximately $1,357 (/£1,100) per annum. The Company deferred its 2016 recovery plan contribution payment of £10,000, placing it into a restricted cash account. The restriction will release before March 31, 2017, when the Company contributes the £10,000 to the Plan. Benefit Payments The following table details expected pension benefit payments for the years 2017 through 2026: (18) DEFINED BENEFIT RETIREMENT PLAN (Continued)
2017 | $ | 16,650 |
2018 | 17,200 |
2019 | 17,800 |
2020 | 18,250 |
2021 | 18,900 |
Years 2022 - 2026 | 104,000 |
Asset Allocation Strategy The investment strategy for pension plan assets is to maintain a diversified portfolio consisting of •Long-term fixed‑income securities that are investment grade or government‑backed in nature; •Common stock mutual funds in U.K. and non-U.K. companies, and;
• | Diversified growth funds, which are invested in a number of investments, including common stock, fixed income funds, properties and commodities.
The Plan, as required by U.K. law, has an independent trustee that sets investment policy. The general strategy is to invest approximately 50% of the assets of the plan in common stock mutual funds and diversified growth funds, with the remainder of the investments in long-term fixed income securities, including corporate bonds and index-linked U.K. gilts. The trustees regularly consult with representatives of the plan sponsor and independent advisors on such matters. The pension plan investments are held in a trust. The weighted‑average maturity of the corporate bond portfolio was 13 years at December 31, 2016. Fair Value Measurements The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Index-linked gilts—Index-linked gilts are U.K. government-backed securities consisting of bills, notes, bonds, and other fixed income securities issued directly by the U.K. Treasury or by government-sponsored enterprises. The fair value recorded by the Plan is calculated using net asset value (NAV) for each investment. Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment. Corporate Stock—This investment category consists of common and preferred stock, including mutual funds, issued by U.K. and non-U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment, except for one small holding that is actively traded. Diversified growth funds - This investment category consists of diversified investment funds, whose holdings include common stock, fixed income funds, properties and commodities of U.K. and non-U.K. securities. The fair value recorded by the Plan is calculated using NAV for each investment. (18) DEFINED BENEFIT RETIREMENT PLAN (Continued) At December 31, 2016 and December 31, 2015, the pension plan assets measured at fair value on a recurring basis were as follows:
December 31, 2016 | Quoted Prices in Active Markets for Identical Inputs (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Plan assets at fair value: |  |  |  |  |  |  |
Temporary cash investments | $ | 1,900 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,900 |
Corporate stock | 480 |  |  | — |  |  | — |  |  | 480 |
Total plan net assets at fair value | $ | 2,380 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,380 |
Plan assets at NAV: |  |  |  |  |  |  |
Index-linked gilts |  |  |  |  |  |  |  |  | 135,141 |
Corporate bonds |  |  |  |  |  |  |  |  | 83,834 |
Corporate stock |  |  |  |  |  |  |  |  | 165,338 |
Diversified growth funds |  |  |  |  |  |  |  | 99,974 |
Total plan assets at NAV |  |  |  |  |  |  | 484,287 |
Total plan assets |  |  |  |  |  |  | $ | 486,667 |
December 31, 2015 | Quoted Prices in Active Markets for Identical Inputs (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Plan assets at fair value: |  |  |  |  |  |  |
Temporary cash investments | $ | 4,673 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,673 |
Corporate stock | 508 |  |  | — |  |  | — |  |  | 508 |
Total plan net assets at fair value | $ | 5,181 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,181 |
Plan assets at NAV: |  |  |  |  |  |  |
Index-linked gilts |  |  |  |  |  |  |  | 123,257 |
Corporate bonds |  |  |  |  |  |  |  | 100,701 |
Corporate stock |  |  |  |  |  |  |  | 172,456 |
Diversified growth funds |  |  |  |  |  |  |  | 116,531 |
Total plan assets at NAV |  |  |  |  |  |  | 512,945 |
Total plan assets |  |  |  |  |  |  | $ | 518,126 |

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