XML 36 R15.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Pension Benefits | 12 Months Ended
--- | ---
Dec. 31, 2017
Defined Benefit Plan [Abstract] |
Pension Benefits | Note 8 – Pension Benefits The Company has a non-contributory defined benefit pension plan covering substantially all employees who meet age and service requirements and who began employment with the Company prior to January 1, 2016 (the “Qualified Pension Plan”). The Company also has a supplemental non-contributory pension plan covering certain management employees (the “Nonqualified Pension Plan” and together with the Qualified Pension Plan, the “Pension Plans”). The Company froze the Pension Plans to new participants, effective as of January 1, 2016. Employees participating in the Pension Plans as of December 31, 2014, will continue to earn benefits. Obligations and Funded Status for the Pension Plans The Company recognizes the funded status (i.e. the difference between the fair value of plan assets and the projected benefit obligation) of the Company’s Pension Plans in the accompanying balance sheets as either an asset or a liability and recognizes a corresponding adjustment to accumulated other comprehensive income (loss), net of tax. The projected benefit obligation is the actuarial present value of the benefits earned to date by plan participants based on employee service and compensation including the effect of assumed future salary increases. The accumulated benefit obligation uses the same factors as the projected benefit obligation, but excludes the effects of assumed future salary increases. The Company’s measurement date for plan assets and obligations is December 31.
| For the Years Ended December 31,
| 2017 |  | 2016
| (in thousands)
Change in benefit obligation: |  |  |
Projected benefit obligation at beginning of year | $ | 69,659 |  |  | $ | 62,547 |
Service cost | 6,638 |  |  | 8,200 |
Interest cost | 2,689 |  |  | 2,908 |
Actuarial loss | 3,708 |  |  | 2,662 |
Benefits paid | (10,757 | ) |  | (6,658 | )
Projected benefit obligation at end of year | 71,937 |  |  | 69,659 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | 31,731 |  |  | 25,769 |
Actual return on plan assets | 2,956 |  |  | 1,575 |
Employer contribution | 7,048 |  |  | 11,045 |
Benefits paid | (10,757 | ) |  | (6,658 | )
Fair value of plan assets at end of year | 30,978 |  |  | 31,731 |
Funded status at end of year | $ | (40,959 | ) |  | $ | (37,928 | )
The Company’s underfunded status for the Pension Plans as of December 31, 2017, and 2016, was $41.0 million and $37.9 million, respectively, and is recognized in the accompanying balance sheets as a portion of other noncurrent liabilities. No plan assets of the Qualified Pension Plan were returned to the Company during the year ended December 31, 2017. There are no plan assets in the Nonqualified Pension Plan. Accumulated Benefit Obligation in Excess of Plan Assets for the Pension Plans
| As of December 31,
| 2017 |  | 2016
| (in thousands)
Projected benefit obligation | $ | 71,937 |  |  | $ | 69,659 |
Accumulated benefit obligation | $ | 56,045 |  |  | $ | 54,681 |
Less: Fair value of plan assets | (30,978 | ) |  | (31,731 | )
Underfunded accumulated benefit obligation | $ | 25,067 |  |  | $ | 22,950 |
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 a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Amortization of the unrecognized net gain or loss resulting from actual experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value) is included as a component of net periodic benefit cost for a year. If, as of the beginning of the year, the unrecognized net gain or loss exceeds 10 percent of the greater of the projected benefit obligation and the market-related value of plan assets, then the amortization is the excess divided by the average remaining service period of participating employees expected to receive benefits under the plan. The pre-tax amounts not yet recognized in net periodic pension costs, but rather recognized in accumulated other comprehensive loss as of December 31, 2017, and 2016, were as follows:
| As of December 31,
| 2017 |  | 2016
| (in thousands)
Unrecognized actuarial losses | $ | 21,397 |  |  | $ | 22,708 |
Unrecognized prior service costs | 66 |  |  | 83 |
Accumulated other comprehensive loss | $ | 21,463 |  |  | $ | 22,791 |
The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost for the year ended December 31, 2018, is $1.3 million. The pension liability adjustments recognized in other comprehensive income (loss) during 2017, 2016, and 2015, were as follows:
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
| (in thousands)
Net actuarial loss | $ | (2,995 | ) |  | $ | (3,322 | ) |  | $ | (4,990 | )
Amortization of prior service cost | 17 |  |  | 16 |  |  | 17 |
Amortization of net actuarial loss | 1,297 |  |  | 1,582 |  |  | 1,486 |
Settlements | 3,009 |  |  | — |  |  | 350 |
Total pension liability adjustment, pre-tax | 1,328 |  |  | (1,724 | ) |  | (3,137 | )
Tax (expense) benefit | (561 | ) |  | 570 |  |  | 1,047 |
Total pension liability adjustment, net of tax | $ | 767 |  |  | $ | (1,154 | ) |  | $ | (2,090 | )
Components of Net Periodic Benefit Cost for the Pension Plans
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
| (in thousands)
Components of net periodic benefit cost: |  |  |  |  |
Service cost | $ | 6,638 |  |  | $ | 8,200 |  |  | $ | 7,949 |
Interest cost | 2,689 |  |  | 2,908 |  |  | 2,496 |
Expected return on plan assets that reduces periodic pension benefit cost | (2,244 | ) |  | (2,235 | ) |  | (2,182 | )
Amortization of prior service cost | 17 |  |  | 16 |  |  | 17 |
Amortization of net actuarial loss | 1,297 |  |  | 1,582 |  |  | 1,486 |
Settlements | 3,009 |  |  | — |  |  | 350 |
Net periodic benefit cost | $ | 11,406 |  |  | $ | 10,471 |  |  | $ | 10,116 |
Pension Plan Assumptions The weighted-average assumptions used to measure the Company’s projected benefit obligation are as follows:
| As of December 31,
| 2017 |  | 2016
Projected benefit obligation: |  |  |
Discount rate | 3.8% |  | 4.2%
Rate of compensation increase | 6.2% |  | 6.2%
The weighted-average assumptions used to measure the Company’s net periodic benefit cost are as follows:
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Net periodic benefit cost: |  |  |  |  |
Discount rate | 4.2% |  | 4.7% |  | 4.3%
Expected return on plan assets (1) | 6.5% |  | 7.5% |  | 7.5%
Rate of compensation increase | 6.2% |  | 6.2% |  | 6.2%
____________________________________________
(1) | There is no assumed expected return on plan assets for the Nonqualified Pension Plan because there are no plan assets in the Nonqualified Pension Plan.
The Company’s pension investment policy includes various guidelines and procedures designed to ensure that assets are prudently invested in a manner necessary to meet the future benefit obligation of the Pension Plans. The policy prohibits the direct investment of plan assets in the Company’s securities. The Qualified Pension Plan’s investment horizon is long-term and accordingly the target asset allocations encompass a strategic, long-term perspective of capital markets, expected risk and return behavior and perceived future economic conditions. The key investment principles of diversification, assessment of risk, and targeting the optimal expected returns for given levels of risk are applied. The Qualified Pension Plan’s investment portfolio contains a diversified blend of investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. This portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate investment performance. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations. The weighted-average asset allocation of the Qualified Pension Plan is as follows:
|  | Target |  | As of December 31,
Asset Category |  | 2018 |  | 2017 |  | 2016
Equity securities |  | 35.0 | % |  | 38.4 | % |  | 28.8 | %
Fixed income securities |  | 43.0 | % |  | 39.8 | % |  | 35.5 | %
Other securities |  | 22.0 | % |  | 21.8 | % |  | 35.7 | %
Total |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
There is no asset allocation of the Nonqualified Pension Plan since there are no plan assets in that plan. An expected return on plan assets of 6.5 percent and 7.5 percent was used to calculate the Company’s obligation under the Qualified Pension Plan as of December 31, 2017, and 2016, respectively. The expected long-term rate of return assumption of the Qualified Pension Plan is based upon the target asset allocation and is determined using forward-looking assumptions in the context of historical returns and volatilities for each asset class, as well as correlations among asset classes. We evaluate the expected rate of return on plan assets assumption on an annual basis. Pension Plan Assets The fair values of the Company’s Qualified Pension Plan assets as of December 31, 2017, and 2016, utilizing the fair value hierarchy discussed in Note 11 – Fair Value Measurements are as follows:
|  |  |  |  | Fair Value Measurements Using:
| Actual Asset Allocation(1) |  | Total |  | Level 1 Inputs |  | Level 2 Inputs |  | Level 3 Inputs
|  |  | (in thousands)
As of December 31, 2017 |  |  |  |  |  |  |  |  |
Cash | — | % |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic (2) | 22.2 | % |  | 6,865 |  |  | 4,805 |  |  | 2,060 |  |  | — |
International (3) | 16.2 | % |  | 5,032 |  |  | 3,806 |  |  | 1,226 |  |  | — |
Total equity securities | 38.4 | % |  | 11,897 |  |  | 8,611 |  |  | 3,286 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |
High-yield bonds (4) | 2.8 | % |  | 876 |  |  | 876 |  |  | — |  |  | — |
Core fixed income (5) | 28.6 | % |  | 8,842 |  |  | 8,842 |  |  | — |  |  | — |
Floating rate corp loans (6) | 8.4 | % |  | 2,607 |  |  | 2,607 |  |  | — |  |  | — |
Total fixed income securities | 39.8 | % |  | 12,325 |  |  | 12,325 |  |  | — |  |  | — |
Other securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodities (7) | 1.9 | % |  | 588 |  |  | 588 |  |  | — |  |  | — |
Real estate (8) | 5.6 | % |  | 1,735 |  |  | — |  |  | — |  |  | 1,735 |
Collective investment trusts (9) | 3.1 | % |  | 959 |  |  | — |  |  | 959 |  |  | — |
Hedge fund (10) | 11.2 | % |  | 3,474 |  |  | — |  |  | — |  |  | 3,474 |
Total other securities | 21.8 | % |  | 6,756 |  |  | 588 |  |  | 959 |  |  | 5,209 |
Total investments | 100.0 | % |  | $ | 30,978 |  |  | $ | 21,524 |  |  | $ | 4,245 |  |  | $ | 5,209 |
As of December 31, 2016 |  |  |  |  |  |  |  |  |
Cash | — | % |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |
Domestic (2) | 18.7 | % |  | 5,945 |  |  | 4,471 |  |  | 1,474 |  |  | — |
International (3) | 10.1 | % |  | 3,192 |  |  | 3,192 |  |  | — |  |  | — |
Total equity securities | 28.8 | % |  | 9,137 |  |  | 7,663 |  |  | 1,474 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |  |
High-yield bonds (4) | 2.6 | % |  | 822 |  |  | 822 |  |  | — |  |  | — |
Core fixed income (5) | 25.0 | % |  | 7,923 |  |  | 7,923 |  |  | — |  |  | — |
Floating rate corp loans (6) | 7.9 | % |  | 2,495 |  |  | 2,495 |  |  | — |  |  | — |
Total fixed income securities | 35.5 | % |  | 11,240 |  |  | 11,240 |  |  | — |  |  | — |
Other securities: |  |  |  |  |  |  |  |  |
Commodities (7) | 1.8 | % |  | 578 |  |  | 578 |  |  | — |  |  | — |
Real estate (8) | 5.1 | % |  | 1,629 |  |  | — |  |  | — |  |  | 1,629 |
Collective investment trusts (9) | 17.5 | % |  | 5,562 |  |  | — |  |  | 5,562 |  |  | — |
Hedge fund (10) | 11.3 | % |  | 3,585 |  |  | — |  |  | — |  |  | 3,585 |
Total other securities | 35.7 | % |  | 11,354 |  |  | 578 |  |  | 5,562 |  |  | 5,214 |
Total investments | 100.0 | % |  | $ | 31,731 |  |  | $ | 19,481 |  |  | $ | 7,036 |  |  | $ | 5,214 |
____________________________________________
(1) | Percentages may not calculate due to rounding.
(2) | Level 1 equity securities consist of United States large and small capitalization companies, which are actively traded securities that can be sold upon demand. Level 2 equity securities are investments in a collective investment fund that is valued at net asset value based on the value of the underlying investments and total units outstanding on a daily basis. The objective of this fund is to approximate the S&P 500 by investing in one or more collective investment funds.
(3) | International equity securities consists of a well-diversified portfolio of holdings of mostly large issuers organized in developed countries with liquid markets, commingled with investments in equity securities of issuers located in emerging markets and believed to have strong sustainable financial productivity at attractive valuations.
(4) | High-yield bonds consist of non-investment grade fixed income securities. The investment objective is to obtain high current income. Due to the increased level of default risk, security selection focuses on credit-risk analysis.
(5) | The objective of core fixed income funds is to achieve value added from sector or issue selection by constructing a portfolio to approximate the investment results of the Barclay’s Capital Aggregate Bond Index with a modest amount of variability in duration around the index.
(6) | Investments consist of floating rate bank loans. The interest rates on these loans are typically reset on a periodic basis to account for changes in the level of interest rates.
(7) | Investments with exposure to commodity price movements, primarily through the use of futures, swaps and other commodity-linked securities.
(8) | The investment objective of direct real estate is to provide current income with the potential for long-term capital appreciation. Ownership in real estate entails a long-term time horizon, periodic valuations, and potentially low liquidity.
(9) | Collective investment trusts invest in short-term investments and are valued at the net asset value of the collective investment trust. The net asset value, as provided by the trustee, is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities.
(10) | The hedge fund portfolio includes an investment in an actively traded global mutual fund that focuses on alternative investments and a hedge fund of funds that invests both long and short using a variety of investment strategies.
Included below is a summary of the changes in Level 3 plan assets (in thousands):
Balance at January 1, 2016 | $ | 5,045 |
Purchases | 561 |
Realized gain on assets | 54 |
Unrealized gain on assets | 115 |
Disposition | (561 | )
Balance at December 31, 2016 | $ | 5,214 |
Purchases | 300 |
Realized gain on assets | 130 |
Unrealized gain on assets | 120 |
Disposition | (555 | )
Balance at December 31, 2017 | $ | 5,209 |
Contributions The Company contributed $7.0 million, $11.0 million, and $6.4 million to the Pension Plans in the years ended December 31, 2017, 2016, and 2015, respectively. The Company expects to make a $4.0 million contribution to the Pension Plans in 2018. Benefit Payments The Pension Plans made actual benefit payments of $10.8 million, $6.7 million, and $8.2 million in the years ended December 31, 2017, 2016, and 2015, respectively. Expected benefit payments over the next 10 years are as follows:
Years Ending December 31, | (in thousands)
2018 | $ | 4,217 |
2019 | $ | 3,818 |
2020 | $ | 4,363 |
2021 | $ | 5,561 |
2022 | $ | 6,117 |
2023 through 2027 | $ | 36,279 |

X
- References No definition available. + Details
Name: | us-gaap_DefinedBenefitPensionPlansAndDefinedBenefitPostretirementPlansDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration