EMPLOYEE BENEFIT PLANS

Pension plans

The Company has three frozen defined benefit pension plans covering certain employees or former employees of three U.S. subsidiaries. The Company also has pension plans covering certain employees of several foreign subsidiaries. The Company’s policy is to fund pension costs as required by law, which is consistent with the funding requirements of federal laws and regulations. Certain foreign subsidiaries maintain unfunded pension plans consistent with local practices and requirements.

The following table provides the change in benefit obligation, change in plan assets, funded status and amounts recognized in the consolidated balance sheet of the defined benefit pension plans as of December 31, 2013 and 2012 (amounts in thousands):



Change in benefit obligation:	2013			2012
Benefit obligation at beginning of year	$	139,104		$	111,955
Acquisition	—			20,258
Service cost	850			380
Interest cost	5,408			5,082
Actuarial (gain) loss	(12,848		)	9,689
Benefits paid	(9,258		)	(8,184		)
Foreign currency translation	(74		)	(76		)
Benefit obligation at end of year	$	123,182		$	139,104
Change in plan assets:
Fair value of plan assets at beginning of year	$	78,168		$	69,097
Acquisition	—			1,797
Actual return on plan assets	10,255			8,574
Employer contributions	4,674			6,845
Benefits paid	(9,223		)	(8,184		)
Foreign currency translation	78			39
Fair value of plan assets at end of year	$	83,952		$	78,168
Unfunded status at end of year	$	(39,230	)	$	(60,936	)
Amounts recognized in consolidated balance sheet:
Noncurrent assets	$	539		$	541
Noncurrent liabilities	(39,769		)	(61,477		)
Net amount recognized in the consolidated balance sheet	$	(39,230	)	$	(60,936	)

The pension benefit obligation included $98.4 million of pension benefit obligation for the three frozen plans in the U.S. and $24.8 million of pension benefit obligation for plans at foreign subsidiaries. The fair value of plan assets included $82.0 million of plan assets for the three frozen plans in the U.S. and $2.0 million of plan assets for foreign plans.



Amounts recognized in accumulated other comprehensive loss:
	2013			2012
Unrecognized prior service cost	$	(754	)	$	(891	)
Unrecognized net loss	(33,070		)	(56,382		)
Deferred tax effect of unrecognized items	12,894			21,594
Net amount recognized in accumulated other comprehensive loss	$	(20,930	)	$	(35,679	)



The weighted-average assumptions used in the actuarial computation that derived the benefit obligations at December 31 were as follows:	2013		2012
Discount rate	4.8	%	4.2	%
Expected long-term return on plan assets	7.4	%	7.4	%

The following table provides the components of net periodic pension cost for the plans, settlement cost and the assumptions used in the measurement of the Company’s benefit obligation for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):



Components of net periodic benefit cost and other amounts recognized in other comprehensive income
Net periodic benefit cost:	2013			2012			2011
Service cost	$	850		$	380		$	264
Interest cost	5,408			5,082			5,467
Assumed return on assets	(5,585		)	(5,022		)	(5,258		)
Amortization of unrecognized prior service cost	137			137			137
Amortization of unrecognized deferred taxes	—			—			(56		)
Amortization of net unrecognized loss	5,264			5,195			3,745
Net periodic pension cost	$	6,074		$	5,772		$	4,299

The estimated net loss and prior service cost that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $3.0 million and $0.1 million, respectively.

The weighted-average assumptions used in the actuarial computation that derived net periodic pension cost for the years ended December 31, 2013, 2012 and 2011 were as follows:



	2013		2012		2011
Discount rate	4.7	%	4.3	%	5.3	%
Expected long-term return on plan assets	7.4	%	7.5	%	7.5	%

The allocation of the fair value of plan assets was as follows:



	Percentage of Plan Assets at December 31,				Target Allocation
Asset Category	2013		2012		2014
U.S. equities (a)	58	%	59	%	40% - 80%
Fixed income	23	%	24	%	20% - 50%
Cash and cash equivalents	7	%	8	%	0% - 20%
International equities (a)	12	%	9	%	0% - 16%
	100	%	100	%


(a)	Total equities may not exceed 80% of total plan assets.

The majority of the Company's foreign plans do not have plan assets. The one foreign plan which has plan assets holds these plan assets in an insurance fund.

The fair value of the plan assets by asset categories at December 31, 2013 was as follows (amounts in thousands):



	Fair Value Measurements as of December 31, 2013
	Total		Level 1		Level 2		Level 3
Money market funds	$	6,051	$	6,051	$	—	$	—
Domestic common stock	32,757		32,757		—		—
Foreign common stock	4,921		4,921		—		—
Corporate bonds	4,012		4,012		—		—
Foreign bonds	519		—		519		—
U.S. government securities	18		18		—		—
Insurance fund	1,974		—		1,974		—
Common / collective trusts	33,700		—		33,700		—
Totals	$	83,952	$	47,759	$	36,193	$	—

The fair value of the plan assets by asset categories at December 31, 2012 was as follows (amounts in thousands):



	Fair Value Measurements as of December 31, 2012
	Total		Level 1		Level 2		Level 3
Money market funds	$	5,866	$	5,866	$	—	$	—
Domestic common stock	30,873		30,873		—		—
Foreign common stock	3,441		3,441		—		—
Corporate bonds	3,284		3,284		—		—
Foreign bonds	531		—		531		—
U.S. government securities	280		280		—		—
Mutual funds	1,109		1,109		—		—
Insurance funds	1,839		—		1,839		—
Common / collective trusts	30,945		—		30,945		—
Totals	$	78,168	$	44,853	$	33,315	$	—

The Company invests in a diversified portfolio consisting of an array of asset classes in an attempt to maximize returns while minimizing risk. These asset classes include U.S. equities, fixed income, cash and cash equivalents, and international equities. The investment objectives are to provide for the growth and preservation of plan assets on a long-term basis through investments in: (i) investment grade securities that provide investment returns that meet or exceed the Standard & Poor’s 500 Index and (ii) investment grade fixed income securities that provide investment returns that meet or exceed the Barclays Capital Aggregate Bond Index. The U.S. equities asset category included the Company’s common stock in the amount of $3.1 million (approximately four percent of total plan assets) at December 31, 2013, and $3.7 million (approximately five percent of total plan assets) at December 31, 2012.

The fair value of money market funds, stock, bonds, U.S. government securities and mutual funds are determined based on valuation for identical instruments in active markets. The fair value of common and collective trusts is determined based on the fair value of the underlying instruments.

The long-term rate of return for plan assets is determined using a weighted-average of long-term historical approximate returns on cash and cash equivalents, fixed income securities, and equity securities considering the anticipated investment allocation within the plans. The expected return on plan assets is anticipated to be 7.4% over the long-term. This rate assumes long-term historical returns of approximately 9% for equities and approximately 6% for fixed income securities using the plans’ target allocation percentages. Professional investment firms, none of which are Titan employees, manage the plan assets.

Although the 2014 minimum pension funding calculations are not finalized, the Company estimates those funding requirements will be approximately $7 million.

Projected benefit payments from the plans as of December 31, 2013, are estimated as follows (amounts in thousands):



2014	$	8,964
2015	8,719
2016	9,179
2017	8,769
2018	9,005
2019-2023	43,380

401(k)/Defined contribution plans

The Company sponsors four 401(k) retirement savings plans in the U.S. and a number of defined contribution plans at foreign subsidiaries. One U.S. plan is for the benefit of substantially all employees who are not covered by a collective bargaining arrangement. Titan provides a 25% matching contribution in the form of the Company’s common stock on the first 6% of the employee’s contribution in this plan. The Company issued 35,207 shares, 27,562 shares and 26,346 shares of treasury stock in connection with this 401(k) plan during 2013, 2012 and 2011, respectively. Expenses to the Company related to this common stock matching contribution were $0.7 million, $0.6 million and $0.5 million for 2013, 2012 and 2011. The other three U.S. 401(k) plans are for employees covered by collective bargaining agreements and do not include a Company matching contribution. Expenses related to foreign defined contribution plans were $4.1 million and $0.8 million for 2013 and 2012, respectively.