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BENEFIT PLANS (Tables)
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12 Months Ended |
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Dec. 31, 2013
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| Reconciliation of Projected Benefit Obligations, Plan Assets and Funded Status of Plans |
Obligations and Funded Status. A reconciliation of the projected benefit obligations, plan assets and funded status of the plans is as follows:
| | | Pension Benefits | | Other Benefits | | | | | 2013 | | 2012 | | 2013 | | 2012 | | | | | (In millions) | | | Change in projected benefit obligation | | | | | | | | | | | | | | | Benefit obligation at January 1, | | $ | 716.8 | | $ | 746.1 | | $ | 27.3 | | $ | 29.9 | | | Service cost | | | 5.4 | | | 6.5 | | | 0.5 | | | 0.5 | | | Interest cost | | | 28.9 | | | 33.4 | | | 1.1 | | | 1.2 | | | Plan participants' contributions | | | - | | | - | | | 1.1 | | | 1.1 | | | Amendments | | | - | | | 7.5 | | | (8.6) | | | - | | | Actuarial loss (gain) | | | (68.6) | | | 68.7 | | | 0.9 | | | (1.7) | | | Foreign currency exchange rate changes | | | (4.2) | | | 1.8 | | | 0.6 | | | - | | | Curtailments | | | - | | | (29.2) | | | - | | | - | | | Settlements | | | - | | | (77.3) | | | - | | | - | | | Benefits paid | | | (41.5) | | | (40.7) | | | (3.3) | | | (3.7) | | | Projected benefit obligation at December 31, | | | 636.8 | | | 716.8 | | | 19.6 | | | 27.3 | | | Change in plan assets | | | | | | | | | | | | | | | Fair value of plan assets at January 1, | | | 548.0 | | | 583.0 | | | 21.4 | | | 19.3 | | | Actual return on plan assets | | | 58.5 | | | 59.0 | | | 2.4 | | | 2.1 | | | Employer contributions | | | 6.7 | | | 7.6 | | | 2.2 | | | 2.6 | | | Plan participants' contributions | | | - | | | - | | | 1.1 | | | 1.1 | | | Foreign currency exchange rate changes | | | (3.6) | | | 1.7 | | | - | | | - | | | Settlements | | | - | | | (62.6) | | | (2.2) | | | - | | | Benefits paid | | | (41.5) | | | (40.7) | | | (3.3) | | | (3.7) | | | Fair value of plan assets at December 31, | | | 568.1 | | | 548.0 | | | 21.6 | | | 21.4 | | | Funded status of plan | | $ | (68.7) | | $ | (168.8) | | $ | 2.0 | | $ | (5.9) | |
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| Net Amount Recognized, or Funded Status of Pension and Other Postretirement Benefit Plans |
The following table represents the net amounts recognized, or the funded status of our pension and other postretirement benefit plans, in our Consolidated Balance Sheets at December 31, 2013 and 2012:
| | | Pension Benefits | | Other Benefits | | (In millions) | | 2013 | | 2012 | | 2013 | | 2012 | | Amounts recognized in the statements of financial position consist of: | | | | | | | | | | | | | | Noncurrent assets | | $ | - | | $ | - | | $ | 5.1 | | $ | - | | Current liabilities | | | (3.9) | | | (3.7) | | | (0.2) | | | - | | Long-term liabilities | | | (64.8) | | | (165.1) | | | (2.9) | | | (5.9) | | Net amount recognized | | $ | (68.7) | | $ | (168.8) | | $ | 2.0 | | $ | (5.9) |
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| Benefit Costs Included in Accumulated Other Comprehensive Loss that have not yet Recognized in Net Periodic Pension Cost |
Included in accumulated other comprehensive loss at December 31, 2013 and 2012, were the following amounts that have not yet been recognized in net periodic pension cost:
| | | Pension Benefits | | Other Benefits | | (In millions) | | 2013 | | 2012 | | 2013 | | 2012 | | Prior service cost, net of accumulated taxes of $3.1
and $3.5 in 2013 and 2012, respectively, for
pension benefits and $(2.6) and $(0.3) in 2013
and 2012, respectively, for other benefits | | $ | 5.1 | | $ | 6.0 | | $ | (4.3) | | $ | (0.4) | | Net actuarial loss, net of accumulated taxes of $112.0
and $151.5 in 2013 and 2012, respectively, for
pension benefits and $2.8 and $4.6 in 2013 and
2012, respectively, for other benefits | | | 196.7 | | | 262.9 | | | 4.7 | | | 7.9 | | Accumulated other comprehensive loss | | $ | 201.8 | | $ | 268.9 | | $ | 0.4 | | $ | 7.5 |
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| Amounts Recognized in Other Comprehensive Income (Loss) |
Changes in plan assets and benefit obligations recognized in other comprehensive income:
| | | Pension Benefits | | Other Benefits | | | (In millions) | | 2013 | | 2012 | | 2013 | | 2012 | | | Amounts arising during the period: | | | | | | | | | | | | | | | Net actuarial loss (gain), net of taxes of $(32.6) and
$21.8 in 2013 and 2012, respectively, for pension
benefits and $0.1 and $(0.8) in 2013 and 2012,
respectively, for other benefits | | $ | (54.9) | | $ | 36.2 | | $ | 0.1 | | $ | (1.8) | | | Foreign currency exchange rate (gain) loss, net of
taxes of $(0.2) and $0.0 in 2013 and 2012,
respectively, for pension benefits | | | (0.3) | | | 0.1 | | | - | | | - | | | Prior service (credit) cost, net of taxes of $(0.3) and
$2.8 in 2013 and 2012, respectively, for pension
benefits and $(3.1) in 2013 for other benefits | | | (0.6) | | | 4.7 | | | (5.4) | | | - | | | | | | | | | | | | | | | | | | Amounts recognized in net periodic benefit cost during the period: | | | | | | | | | | | | | | | Recognized actuarial loss, net of taxes of $(6.4) and
$(5.9) in 2013 and 2012, respectively, for pension
benefits and $(1.2) and $(0.4) in 2013 and 2012,
respectively, for other benefits | | | (10.6) | | | (10.1) | | | (2.0) | | | (0.7) | | | Amortization of prior service cost, net of taxes of
$(0.5) and $(0.3) in 2013 and 2012, respectively,
for pension benefits and $0.2 and $0.1 in 2013
and 2012, respectively, for other benefits | | | (0.8) | | | (0.5) | | | 0.3 | | | 0.1 | | | Curtailments, net of taxes of $(10.6) in 2012 for
pension benefits | | | - | | | (18.4) | | | - | | | - | | | Settlements, net of taxes of $(19.5) in 2012 | | | - | | | (33.5) | | | - | | | - | | | Total recognized in other comprehensive income | | $ | (67.2) | | $ | (21.5) | | $ | (7.0) | | $ | (2.4) | |
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| Components of Net Periodic Benefit Cost |
Components of Net Periodic Benefit Cost. | | | Pension Benefits | | Other Benefits | | | | 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 | | | | | | | | | | | | | | | | | | | | | | | | (In millions) | | | | Service cost | | $ | 5.4 | | $ | 6.5 | | $ | 6.4 | | $ | 0.5 | | $ | 0.5 | | $ | 0.6 | | Interest cost | | | 28.9 | | | 33.4 | | | 34.5 | | | 1.1 | | | 1.2 | | | 1.6 | | Expected return on plan assets | | | (39.0) | | | (46.6) | | | (46.6) | | | (1.6) | | | (1.6) | | | (1.7) | | Amortization of prior service cost | | | 1.3 | | | 0.8 | | | 0.8 | | | (0.5) | | | (0.2) | | | (0.2) | | Recognized actuarial loss | | | 17.0 | | | 16.0 | | | 12.0 | | | 3.2 | | | 1.1 | | | 1.3 | | Net periodic benefit cost | | | 13.6 | | | 10.1 | | | 7.1 | | | 2.7 | | | 1.0 | | | 1.6 | | Curtailments | | | - | | | (0.2) | | | - | | | - | | | - | | | - | | Settlements | | | - | | | 38.9 | | | - | | | - | | | - | | | - | | Total net periodic benefit cost | | $ | 13.6 | | $ | 48.8 | | $ | 7.1 | | $ | 2.7 | | $ | 1.0 | | $ | 1.6 |
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| Amount of Prior Service Cost and Actuarial Loss Included in Accumulated Other Comprehensive Loss that is Expected to Be Recognized in Net Periodic Benefit Cost |
The following represents the amount of prior service cost and actuarial loss included in accumulated other comprehensive loss that is expected to be recognized in net periodic benefit cost during the twelve months ending December 31, 2014:
| | | Pension | | Other | | | (In millions) | | Benefits | | Benefits | | | Actuarial loss, net of taxes of $(4.8) for pension
benefits and $(0.2) for other benefits | | $ | 8.2 | | $ | 0.4 | | | Prior service cost, net of taxes of $(0.3)
for pension benefits and $0.4
for other benefits | | $ | 0.5 | | $ | (0.8) | |
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| Effect of One-Percentage Point Change in Assumed Healthcare Cost Trend Rates |
| | | 1-Percentage | | 1-Percentage | | | (In millions) | | Point Increase | | Point Decrease | | | Effect on total service and interest cost components | | $ | 0.2 | | $ | (0.2) | | | Effect on accumulated postretirement benefit obligation | | $ | 1.4 | | $ | (1.2) | |
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| Estimated Future Benefits Payable for Retirement and Postretirement Plans |
We estimate that the future benefits payable for our retirement and postretirement plans are as follows at December 31, 2013:
| | | U.S. Defined | | Non-U.S. Defined | | Other | | | Years ending December 31, | | Benefit Plans | | Benefit Plans | | Benefit Plans | | | | | (In millions) | | | 2014 | | $ | 40.4 | | $ | 2.4 | | $ | 1.8 | | | 2015 | | $ | 40.9 | | $ | 2.4 | | $ | 1.8 | | | 2016 | | $ | 41.1 | | $ | 2.4 | | $ | 1.7 | | | 2017 | | $ | 40.8 | | $ | 2.5 | | $ | 1.7 | | | 2018 | | $ | 40.6 | | $ | 2.6 | | $ | 1.6 | | | Next five fiscal years to December 31, 2023 | | $ | 201.4 | | $ | 13.9 | | $ | 7.4 | |
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| Reconciliation of Beginning and Ending Balances for Plan Assets Valued using Significant Unobservable Inputs |
The following table shows a reconciliation of the beginning and ending balances for assets valued using significant unobservable inputs:
| | | Private Equity | | Hedge Funds | | Real Assets | | | | | (In millions) | | | Balance at December 31, 2012 | | $ | 36.0 | | $ | 89.1 | | $ | 11.1 | | | Return on plan assets: | | | | | | | | | | | | Unrealized | | | - | | | 8.2 | | | - | | | Realized | | | 2.1 | | | 2.6 | | | 1.2 | | | Purchases | | | 7.1 | | | - | | | 0.4 | | | Sales | | | (6.5) | | | (17.0) | | | (0.5) | | | Balance at December 31, 2013 | | $ | 38.7 | | $ | 82.9 | | $ | 12.2 | |
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Benefit Obligations
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| Weighted-Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost |
Weighted-Average Assumptions. | Weighted-average assumptions used to determine | | Pension Benefits | | | Other Benefits | | | | benefit obligations at December 31, | | 2013 | | | 2012 | | | 2013 | | | 2012 | | | | Discount rate | | 5.07 | % | | 4.17 | % | | 4.49 | % | | 4.03 | % | | | Rate of compensation increase | | 3.26 | % | | 3.56 | % | | N/A | | | N/A | | |
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Benefit Costs
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| Weighted-Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost |
| Weighted-average assumptions used to determine | | Pension Benefits | | | Other Benefits | | | | net periodic benefit cost at December 31, | | 2013 | | | 2012 | | | 2011 | | | 2013 | | | 2012 | | | 2011 | | | | Discount rate | | 4.17 | % | | 4.60 | % | | 5.24 | % | | 4.03 | % | | 4.29 | % | | 4.90 | % | | | Expected return on plan assets | | 7.43 | % | | 7.67 | % | | 7.73 | % | | 7.50 | % | | 7.75 | % | | 7.75 | % | | | Rate of compensation increase | | 3.26 | % | | 4.41 | % | | 4.37 | % | | 4.23 | % | | N/A | | | N/A | | |
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Pension Benefits
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| Fair Value of Plan Assets |
The fair value of the pension assets at December 31, 2013, is as follows: | | | | | | | Fair Value Measurements at Reporting Date Using: | | | Description | | | Fair Value at
December 31, 2013 | | Quoted Prices in
Active Markets
for
Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | | | | | (In millions) | | | Large-Cap Equity | (1) | | $ | 121.1 | | $ | 121.1 | | $ | - | | $ | - | | | Small and Mid-Cap Equity | (1) | | | 28.4 | | | 28.4 | | | - | | | - | | | International Equity | (1) (2) | | | 108.5 | | | 46.7 | | | 61.8 | | | - | | | Fixed Income | (1) (2) | | | 151.1 | | | 11.4 | | | 139.7 | | | - | | | Private Equity | (3) | | | 38.7 | | | - | | | - | | | 38.7 | | | Hedge Funds | (4) | | | 82.9 | | | - | | | - | | | 82.9 | | | Real Assets | (1) (5) | | | 31.8 | | | 19.6 | | | - | | | 12.2 | | | Cash | (1) | | | 5.6 | | | 5.6 | | | - | | | - | | | Total | | | $ | 568.1 | | $ | 232.8 | | $ | 201.5 | | $ | 133.8 | |
| (1)
| Fair value is based on observable market prices for the assets. | |
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| | (2)
| For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.
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| | (3)
| Private equity investments are initially valued at cost. Fund managers periodically review the valuations utilizing subsequent company-specific transactions or deterioration in the company’s financial performance to determine if fair value adjustments are necessary. Private equity investments are typically viewed as long term, less liquid investments with return of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund’s normal life cycle and wind down period. As of December 31, 2013, we had $31.9 million of remaining commitments related to these private equity investments.
| | (4)
| Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 90 days notice.
| | (5)
| For the portion of this asset class categorized as Level 3, fair value is reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams, and comparable market sales. As of December 31, 2013, we had $7.4 million of remaining commitments related to the real asset investments.
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Other Benefits
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| Fair Value of Plan Assets |
The fair value of the postretirement assets at December 31, 2013, is as follows:
| | | | | | | | Fair Value Measurements at Reporting Date Using: | | | Description | | Fair Value at
December 31, 2013 | | Quoted Prices in
Active Markets
for
Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | | | | | | (In millions) | | | Large-Cap Equity | (1) | | | $ | 5.1 | | $ | 5.1 | | $ | - | | $ | - | | | Small and Mid-Cap Equity | (1) | | | | 1.2 | | | 1.2 | | | - | | | - | | | International Equity | (1) | (2) | | | 3.5 | | | 2.0 | | | 1.5 | | | - | | | Fixed Income | (1) | (2) | | | 5.2 | | | 0.5 | | | 4.7 | | | - | | | Private Equity | (3) | | | | 1.6 | | | - | | | - | | | 1.6 | | | Hedge Funds | (4) | | | | 3.5 | | | - | | | - | | | 3.5 | | | Real Assets | (1) | (5) | | | 1.3 | | | 0.8 | | | - | | | 0.5 | | | Cash | (1) | | | | 0.2 | | | 0.2 | | | - | | | - | | | Total | | | | $ | 21.6 | | $ | 9.8 | | $ | 6.2 | | $ | 5.6 | |
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| (1)
| Fair value is based on observable market prices for the assets. | |
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| (2)
| For the portion of this asset class categorized as Level 2, fair value is determined using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.
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| (3)
| Private equity investments are initially valued at cost. Fund managers periodically review the valuations utilizing subsequent company-specific transactions or deterioration in the company’s financial performance to determine if fair value adjustments are necessary. Private equity investments are typically viewed as long term, less liquid investments with return of capital coming via cash distributions from the sale of underlying fund assets. The Plan intends to hold these investments through each fund’s normal life cycle and wind down period.
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| (4)
| Fair value is reported by the fund manager based on observable market prices for actively traded assets within the funds, as well as financial models, comparable financial transactions or other factors relevant to the specific asset for assets with no observable market. These investments are redeemable quarterly with a range of 30 90 days notice.
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| (5)
| For the portion of this asset class categorized as Level 3, fair value is reported by the fund manager based on a combination of the following valuation approaches: current replacement cost less deterioration and obsolescence, a discounted cash flow model of income streams and comparable market sales.
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U.S. Retirement Income Plan, or USRIP
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| Asset Allocation Ranges and Actual Allocations |
The following asset allocation ranges and actual allocations were in effect as of December 31, 2013 and 2012:
| | | | | | Actual | | USRIP | | Range | | | 2013 | | 2012 | | Large-Cap Equity | | 10%-35% | | | 23.7 | % | | 19.1 | % | | Small- and Mid-Cap Equity | | 0%-15% | | | 5.5 | % | | 4.0 | % | | International Equity | | 10%-30% | | | 15.7 | % | | 16.7 | % | | Private Equity | | 2%-10% | | | 7.6 | % | | 7.3 | % | | Hedge Funds | | 10%-30% | | | 16.2 | % | | 18.0 | % | | Real Assets | | 2%-10% | | | 6.2 | % | | 5.9 | % | | Fixed Income | | 15%-40% | | | 24.1 | % | | 27.5 | % | | Cash | | 0%-15% | | | 1.0 | % | | 1.5 | % |
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Canadian Retirement Income Plan, or CRIP
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| Asset Allocation Ranges and Actual Allocations |
The following specifies the asset allocation ranges and actual allocation as of December 31, 2013 and 2012:
| | | | | | Actual | | CRIP | | Range | | | 2013 | | 2012 | | Canadian Equities | | 25%-50% | | | 35.0 | % | | 35.6 | % | | U.S. Equities | | 0%-19% | | | 0.0 | % | | 0.0 | % | | International Equities | | 0%-19% | | | 15.0 | % | | 14.1 | % | | Fixed Income | | 30%-70% | | | 49.0 | % | | 49.9 | % | | Money Market | | 0%-10% | | | 1.0 | % | | 0.4 | % |
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