XML 36 R20.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Note 15 - Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2017
Notes to Financial Statements |
Pension and Other Postretirement Benefits Disclosure [Text Block] | NOTE 15 – EMPLOYEE BENEFIT PLANS Defined Contribution and Deferred Compensation Plans The Company has a 401 (k) retirement investment plan ( “401 (k) Plan”), which is open to all otherwise eligible U.S. employees with at least six months of service. The 401 (k) Plan calls for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The Company may, at its discretion, make additional contributions to the 401 (k) Plan based on the attainment of certain performance targets by its subsidiaries. The Company’s matching contributions are funded bi-monthly and totaled approximately $3.0 million, $3.1 million, and $2.9 million for the years 2017, 2016, and 2015, respectively. No discretionary contributions were made in 2017, 2016, or 2015. Under the Company ’s nonqualified savings plans (“NSPs”), the Company provides eligible employees the opportunity to enter into agreements for the deferral of a specified percentage of their compensation, as defined in the NSPs. The NSPs call for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The obligations of the Company under such agreements to pay the deferred compensation in the future in accordance with the terms of the NSPs are unsecured general obligations of the Company. Participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to hold, invest and reinvest deferrals and contributions under the NSPs. If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant. Deferred compensation in connection with the NSPs totaled $31.9 million at December 31, 2017. The Company invests the deferrals in insurance instruments with readily determinable cash surrender values. The value of the insurance instruments was $28.0 million as of December 31, 2017. Foreign Defined Benefit Plans The Company has trusteed defined benefit retirement plans which cover many of its European employees. The benefits are generally based on years of service and the employee ’s average monthly compensation. Pension expense was $1.9 million, $1.2 million, and $2.1 million for the years 2017, 2016 and 2015, respectively. Plan assets are primarily invested in insurance contracts and equity and fixed income securities. The Company uses a year-end measurement date for the plans. As of December 31, 2017, for the European plans, the Company had a net liability recorded of $13.4 million, an amount equal to their underfunded status, and has recorded in Other Comprehensive Income an amount equal to $48.0 million (net of taxes of approximately $15 million) related to the future amounts to be recorded in net post-retirement benefit costs. The tables presented below set forth the funded status of the Company ’s significant foreign defined benefit plans and required disclosures in accordance with applicable accounting standards
|  | FISCAL YEAR |
|  | 20 17 |  |  | 20 16 |
|  | (in thousands) |
Change in benefit obligation |  |  |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 277,813 |  |  | $ | 243,717 |
Service cost |  |  | 1,628 |  |  |  | 1,032 |
Interest cost |  |  | 5,559 |  |  |  | 6,580 |
Benefits and expenses paid |  |  | (10,267 | ) |  |  | (8,551 | )
Actuarial loss (gain) |  |  | 13,351 |  |  |  | 73,600 |
Member contributions |  |  | 262 |  |  |  | 225 |
Currency translation adjustment |  |  | 32,202 |  |  |  | (38,790 | )
Benefit obligation, end of year |  | $ | 320,548 |  |  | $ | 277,813 |
|  | FISCAL YEAR |
|  | 2017 |  |  | 2016 |
|  | (in thousands) |
Change in plan assets |  |  |  |  |  |  |  |
Plan assets, beginning of year |  | $ | 258,365 |  |  | $ | 239,281 |
Actual return on assets |  |  | 25,691 |  |  |  | 59,364 |
Company contributions |  |  | 2,812 |  |  |  | 4,991 |
Benefits paid |  |  | (10,267 | ) |  |  | (8,552 | )
Currency translation adjustment |  |  | 30,565 |  |  |  | (36,719 | )
Plan assets, end of year |  | $ | 307,166 |  |  | $ | 258,365 |
Reconciliation to balance sheet |  |  |  |  |  |  |  |
Funded status benefit asset/(liability) |  | $ | (13,382 | ) |  | $ | (19,448 | )
Net amount recognized |  | $ | (13,382 | ) |  | $ | (19,448 | )
Amounts recognized in accumulated other comprehensive income (after tax) |  |  |  |  |  |  |  |
Unrecognized actuarial loss |  | $ | 48,443 |  |  | $ | 49,547 |
Unamortized prior service costs |  |  | (471 | ) |  |  | (311 | )
Total amount recognized |  | $ | 47,972 |  |  | $ | 49,236 |
Accumulated Benefit Obligation |  | $ | 313,257 |  |  | $ | 274,414 |
The above disclosure represents the aggregation of information related to the Company ’s two defined benefit plans which cover many of its European employees. As of December 31, 2017, and January 1, 2017, one of these plans, which primarily covers certain employees in the United Kingdom (the “UK Plan”), had an accumulated benefit obligation in excess of the plan assets. The other plan, which covers certain employees in the Netherlands (the “Dutch Plan”), had assets in excess of the accumulated benefit obligation. The following table summarizes this information as of December 31, 2017 and January 1, 2017.
|  | END OF FISCAL YEAR |
|  | 20 17 |  |  | 20 16 |
|  | (in thousands) |
UK Plan |  |  |  |  |  |  |  |
Projected Benefit Obligation |  | $ | 190,992 |  |  | $ | 171,172 |
Accumulated Benefit Obligation |  |  | 190,992 |  |  |  | 171,172 |
Plan Assets |  |  | 179,322 |  |  |  | 153,132 |
Dutch Plan |  |  |  |  |  |  |  |
Projected Benefit Obligation |  | $ | 129,554 |  |  | $ | 106,641 |
Accumulated Benefit Obligation |  |  | 122,265 |  |  |  | 103,242 |
Plan Assets |  |  | 127,844 |  |  |  | 105,233 |
|  | FISCAL YEAR |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in thousands) |
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 1,628 |  |  | $ | 1,032 |  |  | $ | 1,061 |
Interest cost |  |  | 5,559 |  |  |  | 6,580 |  |  |  | 8,384 |
Expected return on plan assets |  |  | (6,496 | ) |  |  | (7,553 | ) |  |  | (8,764 | )
Amortization of prior service cost |  |  | (34 | ) |  |  | 33 |  |  |  | 33 |
Recognized net actuarial (gains)/losses |  |  | 1,287 |  |  |  | 1076 |  |  |  | 1,359 |
Net periodic benefit cost |  | $ | 1,944 |  |  | $ | 1,168 |  |  | $ | 2,073 |
The Company reconciles the components of net periodic pension expense by comparing the beginning balance of assets and the beginning projected obligation against the assumptions of asset return and interest costs. Any significant differences will be explained. There were no such differences in 2017. For 20 18, it is estimated that approximately $1.2 million of expenses related to the amortization of unrecognized items will be included in the net periodic benefit cost. During 2017, other comprehensive income was impacted by approximately $7.0 million comprised of actuarial gain of approximately $5.8 million and amortization of $1.2 million. This decrease was offset by the strengthening of the euro and British Pound against the dollar during 2017.
|  | FISCAL YEAR |
|  | 201 7 |  |  | 201 6 |  |  | 201 5 |
Weighted average assumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 2.0 | % |  |  | 2.7 | % |  |  | 3.0 | %
Expected return on plan assets |  |  | 2.3 | % |  |  | 3.1 | % |  |  | 4.0 | %
Rate of compensation |  |  | 1.75 | % |  |  | 2.0 | % |  |  | 2.0 | %
Weighted average assumptions used to determine benefit obligations |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 2.2 | % |  |  | 2.3 | % |  |  | 3.4 | %
Rate of compensation |  |  | 1.75 | % |  |  | 2.0 | % |  |  | 2.0 | %
The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers. The investment objectives of the foreign defined benefit plans are to maximize the return on the investments without exceeding the limits of the prudent pension fund investment, to ensure that the assets would be sufficient to exceed minimum funding requirements, and to achieve a favorable return against the performance expectation based on historic and projected rates of return over the short term. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The plans ’ net assets did not include the Company’s own stock at December 31, 2017 or January 1, 2017. Dutch Plan Assets and Indexation Benefit As is common in Dutch pension plans, the Dutch Plan includes a provision for discretionary benefit increases termed “indexation.” The indexation benefit is meant to adjust pension benefits for cost-of-living increases, similar to U.S. consumer price index-based cost-of-living adjustments for U.S. retirement plans. The indexation benefit is not guaranteed, and is only provided for and paid out if sufficient assets are available due to favorable asset returns. Both the vested benefit amounts as well as amounts related to the discretionary indexation benefits under the Dutch Plan are paid pursuant to an insurance contract with a private insurer (the “Contract”). The Plan itself is financed by investment assets held within the Contract. The Contract guarantees payment of vested amounts, regardless of whether Plan assets held through the Contract are ultimately sufficient to pay vested amounts, and also provides for payment of the indexation amount on a contingent basis if the actual return on Dutch Plan assets is sufficient to pay it. This type of insurance arrangement is common in The Netherlands, although not necessarily common in other jurisdictions. Because the prior actual and future projected returns on Dutch Plan assets have been determined to be sufficient to provide for the indexation benefit, the Company and the insurer agreed that it was appropriate to provide the indexation benefit under the Contract. The indexation benefit thus becomes an amount payable by the insurer under the Contract, and consequently is recorded as a Plan asset. The corresponding obligation to pay the indexation amount to pensioners thus became a pension liability. As of December 31, 2017, and January 1, 2017, this indexation liability and corresponding asset was $32.7 million and $32.2 million, respectively. The inclusion of this amount does not have any impact on the funded status of the plan, as both the indexation asset and liability are recorded at the same amount. This indexation asset, along with the remainder of the assets under the Dutch Plan, are identified as Level Three assets under the fair value hierarchy. Under the express terms of the Contract, contract value is the greater of (i) the value of the discounted vested benefits of the Dutch Plan (i.e., the benefit amount guaranteed by the insurance company), and (ii) the fair value of the underlying investment assets held by the insurance company under the Contract. As between those two values, the former was the greater for 2017 and 2016 and this represents the plan assets as shown above for the Dutch Plan. However, as explained above, the Contract also will pay the indexation benefit if sufficient assets are available, which the Company believes to be probable based on recent returns. Therefore, in addition to the value of the discounted vested benefits of the Dutch Plan, in determining the fair value of the Contract, the Company believed that it was appropriate to include the value of the indexation payments that are being added to the vested benefit amounts. As explained above, these indexation benefits will be paid out of the Contract if asset returns continue to exceed expectations. If the asset returns are not of an expected amount to allow for indexation, the Company can, at any time, remove this indexation benefit. The Company ’s actual weighted average asset allocations for 2017 and 2016, and the targeted asset allocation for 2018, of the foreign defined benefit plans by asset category, are as follows:
|  | FISCAL YEAR |
|  | 2018 |  |  | 2017 |  |  | 2016 |
|  | Target Allocation |  |  | Percentage of Plan Assets at Year End |
Asset Category: |  |  |  |  |  |  |  |  |  |  |  |  |
Equity Securities |  | 15% | - | 20% |  |  |  | 16 | % |  |  | 15 | %
Debt and Debt Securities |  | 35% | - | 45% |  |  |  | 32 | % |  |  | 36 | %
Other |  | 40% | - | 50% |  |  |  | 52 | % |  |  | 49 | %
|  |  | 100% |  |  |  |  | 100 | % |  |  | 100 | %
Fair Value Measurements of Plan Assets Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under applicable accounting standards are described below:
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 | Inputs to the valuation methodology include :
|  | ● quoted prices for similar assets in active markets;
|  | ● quoted prices for identical or similar assets in inactive markets;
|  | ● inputs other than quoted prices that are observable for the asset; and
|  | ● inputs that are derived principally or corroborated by observable data by correlation or other means.
Level 3 | Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
A financial instrument ’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 31, 2017 and January 1, 2017. As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As noted above the Dutch pension plan assets as represented by the insurance contact are classified as a Level 3 asset and included in the “Other” asset category.
|  | Pension Plan Assets by Category as of December 31, 2017 |
|  | Dutch Plan |  |  | UK Plan |  |  | Total |
|  |  |  |  |  | (in thousands) |  |  |  |  |
Level 1 |  | $ | 0 |  |  | $ | 87,521 |  |  | $ | 87,521 |
Level 2 |  |  | 0 |  |  |  | 68,668 |  |  |  | 68,668 |
Level 3 |  |  | 127,844 |  |  |  | 23,133 |  |  |  | 150,977 |
Total |  | $ | 127,844 |  |  | $ | 179,322 |  |  | $ | 307,166 |
|  | Pension Plan Assets by Category as of January 1, 2017 |
|  | Dutch Plan |  |  | UK Plan |  |  | Total |
|  |  |  |  |  | (in thousands) |  |  |  |  |
Level 1 |  | $ | 0 |  |  | $ | 80,048 |  |  | $ | 80,048 |
Level 2 |  |  | 0 |  |  |  | 50,364 |  |  |  | 50,364 |
Level 3 |  |  | 105,233 |  |  |  | 22,720 |  |  |  | 127,953 |
Total |  | $ | 105,233 |  |  | $ | 153,132 |  |  | $ | 258,365 |
The tables below detail the foreign defined benefit plans ’ assets by asset allocation and fair value hierarchy:
|  | 2017 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  |  |  |  |  | (in thousands) |  |  |  |  |
Asset Class |  |  |  |  |  |  |  |  |  |  |  |
Equity Securities |  | $ | 48,285 |  |  | $ | 0 |  |  | $ | 0 |
Debt and Debt Securities |  |  | 36,780 |  |  |  | 41,381 |  |  |  | 19,883 |
Other (including cash) |  |  | 2,456 |  |  |  | 27,287 |  |  |  | 131,094 |
|  | $ | 87,521 |  |  | $ | 68,668 |  |  | $ | 150,977 |
|  | 201 6 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  |  |  |  |  | (in thousands) |  |  |  |  |
Asset Class |  |  |  |  |  |  |  |  |  |  |  |
Equity Securities |  | $ | 37,696 |  |  | $ | 0 |  |  | $ | 0 |
Debt and Debt Securities |  |  | 37,175 |  |  |  | 36,378 |  |  |  | 19,224 |
Other (including cash) |  |  | 5,177 |  |  |  | 13,986 |  |  |  | 108,729 |
|  | $ | 80,048 |  |  | $ | 50,364 |  |  | $ | 127,953 |
With the exception of the Dutch Plan assets as discussed above, the assets identified as level 3 above in 2017 and 2016 relate to insured annuities and direct lending assets held by the UK Plan. The fair value of these assets was calculated using the present value of the future cash flows due under the insurance annuities and for the direct lending assets the value is based on the asset value from the latest available valuation with adjustments for any drawdowns and distribution payments made between the valuation date and the reporting date. The table below indicates the change in value related to these level 3 assets during 2017:
|  | 201 7 |
|  | (in thousands) |
Balance of level 3 assets, beginning of year |  | $ | 127,953 |
Interest cost |  |  | 2,633 |
Benefits paid |  |  | (3,728 | )
Assets transferred in to (out of) Level 3 |  |  | (2,089 | )
Actuarial gain (loss) |  |  | 8,753 |
Translation adjustment |  |  | 17,455 |
Ending Balance of level 3 assets |  | $ | 150,977 |
During 20 18, the Company expects to contribute $3.3 million to the plans. It is anticipated that future benefit payments for the foreign defined benefit plans will be as follows:
FISCAL YEAR |  |  | EXPECTED PAYMENTS |
|  |  |  |  | (in thousands) |
201 8 |  |  |  |  | $ | 9,115 |
201 9 |  |  |  |  |  | 9,334 |
20 20 |  |  |  |  |  | 9,650 |
20 21 |  |  |  |  |  | 10,011 |
20 22 |  |  |  |  |  | 10,257 |
2023 | - | 2027 |  |  |  | 54,661 |
Domestic Defined Benefit Plan The Company maintains a domestic nonqualified salary continuation plan (“SCP”) , which is designed to induce selected officers of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those which they may receive under the Company’s other retirement plans and benefit programs. The SCP entitles participants to: (i) retirement benefits upon normal retirement at age 65 (or early retirement as early as age 55 ) after completing at least 15 years of service with the Company (unless otherwise provided in the SCP), payable for the remainder of their lives (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) and in no event less than 10 years under the death benefit feature; (ii) disability benefits payable for the period of any total disability; and (iii) death benefits payable to the designated beneficiary of the participant for a period of up to 10 years. Benefits are determined according to one of three formulas contained in the SCP, and the SCP is administered by the Compensation Committee of the Company’s Board of Directors, which has full discretion in choosing participants and the benefit formula applicable to each. The Company’s obligations under the SCP are currently unfunded (although the Company uses insurance instruments to hedge its exposure thereunder). The Company is required to contribute the present value of its obligations thereunder to an irrevocable grantor trust in the event of a change in control as defined in the SCP. The Company uses a year-end measurement date for the domestic SCP. The tables presented below set forth the required disclosures in accordance with applicable accounting standards, and amounts recognized in the consolidated financial statements related to the domestic SCP. There is no service cost component of the change in benefit obligation in 2017 as there are no longer any active participants in the plan.
|  | FISCAL YEAR |
|  | 2017 |  |  | 2016 |
|  | (in thousands) |
Change in benefit obligation |  |  |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 29,700 |  |  | $ | 25,860 |
Service cost |  |  | 0 |  |  |  | 440 |
Interest cost |  |  | 1,256 |  |  |  | 1,269 |
Benefits paid |  |  | (1,943 | ) |  |  | (1,012 | )
Actuarial loss (gain) |  |  | 2,906 |  |  |  | 3,143 |
Benefit obligation, end of year |  | $ | 31,919 |  |  | $ | 29,700 |
The amounts recognized in the consolidated balance sheets are as follows:
|  | 20 17 |  |  | 20 16 |
|  | (in thousands) |
Current liabilities |  | $ | 2,030 |  |  | $ | 1,890 |
Non-current liabilities |  |  | 29,889 |  |  |  | 27,810 |
Total benefit obligation |  | $ | 31,919 |  |  | $ | 29,700 |
The components of the amounts in accumulated other comprehensive income, after tax, are as follows:
|  | 20 17 |  |  | 20 16 |
|  | (in thousands) |
Unrecognized actuarial loss |  |  | 8,582 |  |  | $ | 5,626 |
The accumulated benefit obligation related to the SCP was $31.9 million and $29.7 million as of December 31, 2017 and January 1, 2017, respectively. The SCP is currently unfunded; as such, the benefit obligations disclosed are also the benefit obligations in excess of the plan assets. The Company uses insurance instruments to help limit its exposure under the SCP.
|  | 20 17 |  |  | 20 16 |  |  | 20 15 |
|  | (in thousands, except for assumptions) |
A ssumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 3.85 | % |  |  | 4.25 | % |  |  | 4.0 | %
Rate of compensation |  |  | - |  |  |  | 4.0 | % |  |  | 4.0 | %
Assumptions used to determine benefit obligations |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 3.5 | % |  |  | 3.85 | % |  |  | 4.25 | %
Rate of compensation |  |  | - |  |  |  | 4.0 | % |  |  | 4.0 | %
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 0 |  |  | $ | 440 |  |  | $ | 594 |
Interest cost |  |  | 1,256 |  |  |  | 1,269 |  |  |  | 1,113 |
Amortization s |  |  | 364 |  |  |  | 811 |  |  |  | 522 |
Net periodic benefit cost |  | $ | 1,620 |  |  | $ | 2,520 |  |  | $ | 2,229 |
The changes in other comprehensive income during 20 17 related to the SCP as a result of plan activity and valuation were approximately $1.7 million, after tax, primarily comprised of a net loss during the period of $2.0 million and amortization of loss of $0.3 million. In addition to these items, as a result of the recently enacted U.S. Tax Cuts and Jobs Act changes, the Company increased its minimum pension liability which resides in accumulated other comprehensive income by $1.3 million to record the liability net of the new lower U.S. federal tax rate. For 20 18, the Company estimates that approximately $0.5 million of expenses related to the amortization of unrecognized items will be included in net periodic benefit cost for the SCP. During 20 17, the Company contributed $1.9 million in the form of direct benefit payments for its domestic SCP. It is anticipated that future benefit payments for the SCP will be as follows:
FISCAL YEAR |  |  | EXPECTED PAYMENTS |
|  |  |  |  | (in thousands) |
20 18 |  |  |  |  | $ | 2,030 |
20 19 |  |  |  |  |  | 2,030 |
20 20 |  |  |  |  |  | 2,030 |
20 21 |  |  |  |  |  | 2,030 |
202 2 |  |  |  |  |  | 2,030 |
2023 | - | 2027 |  |  |  | 9,990 |

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
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