XML 30 R16.htm IDEA: XBRL DOCUMENT

Employee Benefit Plans

12 Months Ended

Jun. 30, 2018

Compensation and Retirement Disclosure [Abstract]

9. Employee Benefit Plans

Domestic Pension Plan

We maintain a noncontributory defined benefit pension plan for all domestic nonunion employees employed on or prior to December 31, 2013, who meet certain requirements of age, length of service and hours worked per year. Plan benefits are based upon years of service and average compensation, as defined. The measurement dates for the plan were as of June 30, 2018, 2017 and 2016.

We amended the plan to eliminate credit for future service and compensation increases, effective September 2016. The amendment resulted in a pension curtailment gain of $6,822 recorded in other comprehensive income. Separately, we completed a partial settlement of the plan in November 2016 and recognized $1,702 of expense in the consolidated statements of operations.

Changes in the projected benefit obligation, plan assets and funded status of the plan were:

For the Years Ended June 30	2018			2017
Change in projected benefit obligation
Projected benefit obligation at beginning of year		$	63,260		$	75,664
Service cost			—			845
Interest cost			2,157			2,045
Benefits paid			(2,196)			(1,521)
Actuarial (gain) loss			(1,664)			(1,448)
Liability (gain) due to curtailment			—			(6,822)
Settlement payments			—			(5,503)
Projected benefit obligation at end of year		$	61,557		$	63,260

For the Years Ended June 30	2018			2017
Change in plan assets
Fair value of plan assets at beginning of year		$	57,110		$	54,293
Actual return on plan assets			965			5,647
Employer contributions			2,768			4,194
Benefits paid			(2,195)			(1,521)
Settlement payments			—			(5,503)
Fair value of plan assets at end of year		$	58,648		$	57,110
Funded status at end of year		$	(2,909)		$	(6,150)

The funded status is included in other liabilities in the consolidated balance sheets.

The Company expects to contribute approximately $1,035 to the plan during 2019. We seek to maintain an asset balance that meets the long-term funding requirements identified by actuarial projections while also satisfying ERISA fiduciary responsibilities.

Accumulated other comprehensive (income) loss related to the plan was:

For the Years Ended June 30	2018			2017
Accumulated Other Comprehensive (Income) Loss Related to Pension Plan
Balance at beginning of period		$	18,059		$	30,977
Amortization of net actuarial loss			(453)			(9,213)
Current period net actuarial loss (gain)			607			(3,705)
Net change			154			(12,918)
Balance at end of period		$	18,213		$	18,059

Amortization of unrecognized net actuarial loss will be approximately $432 during 2019.

Net pension expense was:

For the Years Ended June 30	2018			2017			2016
Service cost–benefits earned during the year		$	—		$	845		$	2,939
Interest cost on benefit obligation			2,157			2,045			2,893
Expected return on plan assets			(3,236)			(3,389)			(3,177)
Amortization of net actuarial loss and prior service costs			453			672			1,784
Curtailment expense			—			16			—
Settlement expense			—			1,702			—
Net periodic pension expense (benefit)		$	(626)		$	1,891		$	4,439

Significant actuarial assumptions for the plan were:

For the Years Ended June 30	2018		2017		2016
Discount rate for service cost		N/A		4.0%		4.6%
Discount rate for interest cost		3.9%		3.2%		4.6%
Expected rate of return on plan assets		5.6%		6.1%		6.1%
Discount rate for year-end benefit obligation		4.2%		3.9%		3.9%

The plan used the Aon Hewitt AA Bond Universe as a benchmark for its discount rate as of June 30, 2018, 2017 and 2016. The discount rate is determined by matching the plan’s timing and amount of expected cash outflows to a bond yield curve constructed from a population of AA-rated corporate bond issues that are generally non-callable and have at least $250 million par value outstanding. From this, the discount rate that results in the same present value is calculated.

Estimated future benefit payments are:

For the Years Ended June 30
2019	$	2,359
2020		2,627
2021		2,869
2022		3,078
2023		3,262
2024–2028		17,984

The plan’s target asset allocations for 2019 and the weighted-average asset allocation of plan assets as of June 30, 2018 and 2017 are:

	Target Allocation	Percentage of Plan Assets
For the years ended June 30	2019	2018		2017
Debt securities	55%–75%		63%		33%
Equity securities	15%–35%		26%		38%
Global asset allocation/risk parity(1)	0%–20%		10%		17%
Other	0%–10%		1%		12%

(1) The global asset allocation/risk parity category consists of a variety of asset classes including, but not limited to, global bonds, global equities, real estate and commodities.

The expected long-term rate of return for the plan’s total assets is generally based on the plan’s asset mix. In determining the rate to use, we consider the expected long-term real returns on asset categories, expectations for inflation, estimates of the effect of active management and actual historical returns.

The investment policy and strategy is to earn a long-term investment return sufficient to meet the obligations of the plan, while assuming a moderate amount of risk in order to maximize investment return. In order to achieve this goal, assets are invested in a diversified portfolio consisting of equity securities, debt securities, and other investments in a manner consistent with ERISA’s fiduciary requirements.

The fair values of the plan assets by asset category were:

	Fair Value Measurements Using
As of June 30, 2018	Level 1			Level 2			Level 3			Total
Cash and cash equivalents		$	428		$	—		$	—		$	428
Common-collective funds
Global large cap equities			—			11,632			3,811			15,443
Fixed income securities			—			36,671			—			36,671
Global asset allocations/risk parity			—			2,957			—			2,957
Other
Global asset allocations/risk parity			—			—			2,881			2,881
Other			—			—			268			268
		$	428		$	51,260		$	6,960		$	58,648

	Fair Value Measurements Using
As of June 30, 2017	Level 1			Level 2			Level 3			Total
Cash and cash equivalents		$	3,023		$	—		$	—		$	3,023
Common-collective funds
Global large cap equities			—			12,385			7,132			19,517
Fixed income securities			—			16,850			1,136			17,986
Global asset allocations/risk parity			—			5,822			—			5,822
Mutual funds
Global Equities			1,972			—			—			1,972
Fixed income securities			1,099			—			—			1,099
Global asset allocations/risk parity			—			—			—			—
Other
Global asset allocations/risk parity			—			—			4,103			4,103
Other			—			—			3,588			3,588
		$	6,094		$	35,057		$	15,959		$	57,110

The table below provides a summary of the changes in the fair value of Level 3 assets:

Change in Fair Value Level 3 assets	2018			2017
Balance at beginning of period		$	15,959		$	20,513
Redemptions			(9,901)			(9,353)
Purchases			—			2,533
Change in fair value			902			2,266
Balance at end of period		$	6,960		$	15,959

The following outlines the valuation methodologies used to estimate the fair value of plan assets:

• Cash and cash equivalents are valued at $1 per unit;

• Common-collective funds are determined based on current market values of the underlying assets of the fund;

• Mutual funds and foreign currency deposits are valued using quoted market prices in active markets; and

• For Level 3 managed assets, business appraisers use a combination of valuations and appraisal methodologies, as well as a number of assumptions to create a price that brokers evaluate. For Level 3 non-managed assets, pricing is provided by various sources, such as issuer or investment manager.

Other employee benefit plans

We provide a 401(k) retirement savings plan, under which United States employees may make pre-tax and post-tax contributions. The Company contributes: (i) a matching contribution equal to 100% of the first 1% of an employee’s contribution; (ii) a matching contribution equal to 50% of the next 5% of an employee’s contribution; (iii) a non-elective contribution of 3% of an employee’s compensation; and, (iv) an additional discretionary contribution of up to 4% of compensation, depending on the employee’s age and years of service, provided that such contributions comply with ERISA non-discrimination requirements. Employee and Company contributions are subject to certain ERISA limitations. Employees are fully vested in Company contributions after two years of service. Our contribution expense was $4,937, $4,154, and $2,309, in 2018, 2017 and 2016, respectively.

Our consolidated balance sheets include other employee-related liabilities of $15,536 and $15,139 as of June 30, 2018 and 2017, respectively, including international retirement plans, supplemental retirement benefits and long-term incentive arrangements. Expense under these plans was $4,009, $4,304, and $5,239 in 2018, 2017 and 2016, respectively.