Annual report pursuant to Section 13 and 15(d)

BENEFIT PLANS (Tables)

v3.10.0.1
BENEFIT PLANS (Tables)
12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Reconciliation of Projected Benefit Obligations, Plan Assets and Funded Status of Plans
A reconciliation of the projected benefit obligations, plan assets and funded status of the plans is as follows:
 
Pension Benefits
 
Other Benefits
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Change in projected benefit obligation
 

 
 

 
 

 
 

Benefit obligation at January 1,
$
731.6

 
$
693.6

 
$
24.2

 
$
22.5

Service cost
3.6

 
4.0

 
0.4

 
0.4

Interest cost
26.4

 
28.5

 
0.8

 
0.9

Plan participants’ contributions

 

 
0.7

 
0.5

Actuarial loss (gain)
(49.4
)
 
45.5

 
(1.5
)
 
2.5

Foreign currency exchange rate changes
(3.3
)
 
3.1

 
(0.1
)
 
0.1

Benefits paid
(42.9
)
 
(43.1
)
 
(2.6
)
 
(2.7
)
Projected benefit obligation at December 31,
666.0

 
731.6

 
21.9

 
24.2

Change in plan assets


 
 

 
 

 
 

Fair value of plan assets at January 1,
561.1

 
515.3

 
17.1

 
16.6

Actual return on plan assets
(18.7
)
 
81.2

 
(0.6
)
 
2.9

Employer contributions
36.3

 
5.9

 
1.9

 
2.2

Plan participants’ contributions

 

 
0.7

 
0.5

Foreign currency exchange rate changes
(2.0
)
 
1.8

 

 

Other disbursements

 

 
(2.6
)
 
(2.4
)
Benefits paid
(42.9
)
 
(43.1
)
 
(2.6
)
 
(2.7
)
Fair value of plan assets at December 31,
533.8

 
561.1

 
13.9

 
17.1

Funded status of plan
$
(132.2
)
 
$
(170.5
)
 
$
(8.0
)
 
$
(7.1
)
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, 2018 and 2017:
 
 
Pension Benefits
 
Other Benefits
 
 
2018
 
2017
 
2018
 
2017
 
 
(In millions)
Amounts recognized in the statements of financial position consist of:
 
 

 
 

 
 

 
 

Noncurrent assets
 
$

 
$

 
$

 
$

Current liabilities
 
(5.6
)
 
(5.4
)
 
(0.1
)
 
(0.2
)
Long-term liabilities
 
(126.6
)
 
(165.1
)
 
(7.9
)
 
(6.9
)
Net amount recognized
 
$
(132.2
)
 
$
(170.5
)
 
$
(8.0
)
 
$
(7.1
)
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, 2018 and 2017, were the following amounts that have not yet been recognized in net periodic pension cost:
 
 
Pension Benefits
 
Other Benefits
 
 
2018
 
2017
 
2018
 
2017
 
 
(In millions)
Prior service cost, net of accumulated taxes of $1.9 and $2.0 in 2018 and 2017, respectively, for pension benefits and $(0.3) and $(0.5) in 2018 and 2017, respectively, for other benefits
 
$
5.9

 
$
6.3

 
$
(0.9
)
 
$
(1.8
)
Net actuarial loss, net of accumulated taxes of $88.7 and $91.0 in 2018 and 2017, respectively, for pension benefits and $2.8 and $3.1 in 2018 and 2017, respectively, for other benefits
 
283.4

 
243.2

 
8.7

 
9.8

Impact of Tax Cuts and Jobs Act of 2017
 

 
48.7

 

 
1.3

Accumulated other comprehensive loss
 
$
289.3

 
$
298.2

 
$
7.8

 
$
9.3

Amounts Recognized in Other Comprehensive Income (Loss)
The following shows amounts recognized in other comprehensive income (loss) during the twelve months ended December 31, 2018 and 2017:

Changes in plan assets and benefit obligations recognized in other comprehensive income:
 
 
Pension Benefits
 
Other Benefits
 
 
2018
 
2017
 
2018
 
2017
 
 
(In millions)
Amounts arising during the period:
 
 

 
 

 
 

 
 

Net actuarial loss (gain), net of taxes of $2.6 in 2018 and $0.0 in 2017, respectively, for pension benefits and $0.0 in 2018 and $0.1 in 2017, respectively, for other benefits
 
$
6.6

 
$
2.5

 
$
(1.5
)
 
$
0.9

Foreign currency exchange rate gain, net of taxes of ($0.1) in 2018 and $(1.2) in 2017, respectively, for pension benefits and $0.0 in 2018 and 2017, respectively, for other benefits
 
(0.2
)
 
(0.4
)
 
0.3

 
1.1

 
 
 
 
 
 
 
 
 
Amounts recognized in net periodic benefit cost during the period:
 
 

 
 

 
 

 
 

Recognized actuarial loss, net of taxes of $(4.8) and $(3.7) in 2018 and 2017, respectively, for pension benefits and $(0.3) in 2018 and 2017, respectively, for other benefits
 
(14.9
)
 
(11.8
)
 
(1.1
)
 
(1.0
)
Amortization of prior service cost, net of taxes of $(0.1) 2018 and 2017, for pension benefits and $0.2 in 2018 and 2017 for other benefits
 
(0.4
)
 
(0.5
)
 
0.8

 
0.8

Total recognized in other comprehensive income
 
$
(8.9
)
 
$
(10.2
)
 
$
(1.5
)
 
$
1.8

Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost
 
Pension Benefits
 
Other Benefits
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
 
(In millions)
Service cost
$
3.6

 
$
4.0

 
$
3.6

 
$
0.4

 
$
0.4

 
$
0.3

Interest cost
26.4

 
28.5

 
31.3

 
0.8

 
0.9

 
0.8

Expected return on plan assets
(37.5
)
 
(37.4
)
 
(37.6
)
 
(1.1
)
 
(1.2
)
 
(1.4
)
Amortization of prior service cost
0.5

 
0.6

 
0.8

 
(1.0
)
 
(1.0
)
 
(1.1
)
Recognized actuarial loss (gain)
19.7

 
15.5

 
13.6

 
1.4

 
1.3

 
0.8

Total net periodic benefit cost (income)
$
12.7

 
$
11.2

 
$
11.7

 
$
0.5

 
$
0.4

 
$
(0.6
)
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, 2018:
 
 
Pension Benefits
 
Other Benefits
 
 
(In millions)
Actuarial loss, net of taxes of $3.7 for pension benefits and $0.3 for other benefits
 
$
11.5

 
$
1.0

Prior service cost, net of taxes of $0.1 for pension benefits and $(0.2) for other benefits
 
$
0.4

 
$
(0.8
)
Weighted-Average Assumptions used to Determine Benefit Obligations and Net Periodic Benefit Cost
Weighted-Average Assumptions
Weighted-average assumptions used to determine benefit obligations at December 31,
 
Pension Benefits
 
Other Benefits
 
2018
 
2017
 
2018
 
2017
Discount rate
 
4.39
%
 
3.73
%
 
4.30
%
 
3.60
%
Rate of compensation increase
 
4.93
%
 
4.88
%
 
N/A

 
N/A


 
Weighted-average assumptions used to determine net periodic benefit cost at December 31,
 
Pension Benefits
 
Other Benefits
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
Discount rate
 
3.73
%
 
4.23
%
 
4.86
%
 
3.60
%
 
3.98
%
 
4.39
%
Expected return on plan assets
 
7.14
%
 
7.14
%
 
7.14
%
 
7.25
%
 
7.25
%
 
7.25
%
Rate of compensation increase
 
4.88
%
 
4.88
%
 
4.80
%
 
N/A

 
N/A

 
N/A

Effect of One-Percentage Point Change in Assumed Healthcare Cost Trend Rates
A one-percentage point change in assumed healthcare cost trend rates at December 31, 2018 would have had the following effects: 
 
 
 
1-Percentage Point Increase
 
1-Percentage Point Decrease
 
 
(In millions)
Effect on total service and interest cost components
 
$
0.1

 
$
(0.1
)
Effect on accumulated postretirement benefit obligation
 
$
1.4

 
$
(1.2
)
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, 2018:
Years ending December 31, 2018
 
U.S. Defined Benefit Plans
 
Non-U.S. Defined Benefit Plans
 
Other Benefit Plans
 
 
(In millions)
2019
 
$
42.9

 
$
1.9

 
$
1.6

2020
 
$
43.1

 
$
1.9

 
$
1.8

2021
 
$
43.4

 
$
1.9

 
$
1.8

2022
 
$
43.3

 
$
2.0

 
$
1.8

2023
 
$
43.0

 
$
2.0

 
$
1.8

Next five fiscal years to December 31, 2028
 
$
204.8

 
$
11.7

 
$
9.6

Fair Value of Plan Assets
The fair value of the postretirement assets at December 31, 2018 and 2017, are as follows:
 
 
 
 

 
Fair Value Measurements at Reporting Date Using:
Description
 
Fair Value at December 31, 2018
 
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) 
 
$
1.8

 
$
1.8

 
$

 
$

Small- and Mid-Cap Equity
(1) 
 
0.5

 
0.5

 

 

International Equity
(1) (2) 
 
1.9

 
0.3

 
1.6

 

Fixed Income
(2) 
 
7.4

 

 
7.4

 

Private Equity
(3) 
 
0.5

 

 

 
0.5

Hedge Funds
(4) 
 
1.0

 

 

 
1.0

Real Assets
(5) 
 
0.6

 

 

 
0.6

Cash
(1) 
 
0.2

 
0.2

 

 

Total
 
 
$
13.9

 
$
2.8

 
$
9.0

 
$
2.1


 
 
 
 

 
Fair Value Measurements at Reporting Date Using:
Description
 
Fair Value at December 31, 2017
 
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) 
 
$
4.2

 
$
4.2

 
$

 
$

Small- and Mid-Cap Equity
(1) 
 
1.3

 
1.3

 

 

International Equity
(1) (2) 
 
2.7

 
0.5

 
2.2

 

Fixed Income
(2) 
 
6.0

 

 
6.0

 

Private Equity
(3) 
 
0.8

 

 

 
0.8

Hedge Funds
(4) 
 
1.2

 

 

 
1.2

Real Assets
(5) 
 
0.6

 

 

 
0.6

Cash
(1) 
 
0.3

 
0.3

 

 

Total
 
 
$
17.1

 
$
6.3

 
$
8.2

 
$
2.6



(1) 
Fair value is based on observable market prices for the assets.

(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.

(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.

(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 3090 days notice.

(5) 
The fair value of Real Assets are 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.
The fair value of the pension assets at December 31, 2018 and 2017, are as follows:
 
 
 
 

 
Fair Value Measurements at Reporting Date Using:
 
 
 
Fair Value at December 31, 2018
 
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) 
 
$
64.6

 
$
64.6

 
$

 
$

Small- and Mid-Cap Equity
(1) 
 
18.3

 
18.3

 

 

International Equity
(1) (2) 
 
90.4

 
10.0

 
80.4

 

Fixed Income
(2) 
 
281.7

 

 
281.7

 

Private Equity
(3) 
 
18.6

 

 

 
18.6

Hedge Funds
(4) 
 
34.3

 

 

 
34.3

Real Assets
(5) 
 
19.9

 

 

 
19.9

Cash
(1) 
 
6.0

 
6.0

 

 

Total
 
 
$
533.8

 
$
98.9

 
$
362.1

 
$
72.8

 

 
 
 
 

 
Fair Value Measurements at Reporting Date Using:
 
 
 
Fair Value at December 31, 2017
 
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) 
 
$
125.5

 
$
125.5

 
$

 
$

Small- and Mid-Cap Equity
(1) 
 
39.0

 
39.0

 

 

International Equity
(1) (2) 
 
105.1

 
13.2

 
91.9

 

Fixed Income
(2) 
 
204.0

 

 
204.0

 

Private Equity
(3) 
 
24.1

 

 

 
24.1

Hedge Funds
(4) 
 
35.0

 

 

 
35.0

Real Assets
(5) 
 
18.7

 

 

 
18.7

Cash
(1) 
 
9.7

 
9.7

 

 

Total
 
 
$
561.1

 
$
187.4

 
$
295.9

 
$
77.8


(1) 
Fair value is based on observable market prices for the assets.

(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.

(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, 2018 and 2017, we had $9.9 million and $10.7 million, respectively, 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 3090 days notice.

(5) 
The fair value of Real Assets are 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, 2018 and 2017, we had $0.1 million and $0.5 million, respectively, of remaining commitments related to the real asset investments.
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 for the years ended December 31, 2018 and 2017:
 
Private Equity
 
Hedge Funds
 
Real Assets
 
(In millions)
Balance at December 31, 2016
$
33.5

 
$
33.7

 
$
19.3

Return on plan assets:
 
 
 
 
 
Unrealized
(1.8
)
 
1.8

 
0.1

Realized
1.0

 

 
(0.1
)
Purchases
1.0

 

 
0.5

Sales
(9.6
)
 
(0.5
)
 
(1.1
)
Balance at December 31, 2017
$
24.1

 
$
35.0

 
$
18.7

Return on plan assets:
 

 
 

 
 

Unrealized
$
1.3

 
$
(0.6
)
 
$
1.6

Realized
1.7

 

 

Purchases
1.1

 

 
0.3

Sales
(9.6
)
 
(0.1
)
 
(0.7
)
Balance at December 31, 2018
$
18.6

 
$
34.3

 
$
19.9

Asset Allocation Ranges and Actual Allocations
The following asset allocation ranges and actual allocations were in effect as of December 31, 2018 and 2017
 
Range
 
Actual
USRIP
2018
 
2017
 
2018
 
2017
Large-Cap Equity
5% - 20%
 
15% - 40%
 
13.2
%
 
24.7
%
Small- and Mid-Cap Equity
0% - 15%
 
0% - 15%
 
3.7
%
 
7.6
%
International Equity
5% - 20%
 
10% - 30%
 
13.8
%
 
15.6
%
Private Equity
0% - 10%
 
2% - 10%
 
3.8
%
 
4.7
%
Hedge Funds
0% - 10%
 
0% - 10%
 
7.0
%
 
6.8
%
Real Assets
0% - 10%
 
2% - 10%
 
4.1
%
 
3.7
%
Fixed Income
35% - 65%
 
20% - 55%
 
53.2
%
 
35.1
%
Cash
0% - 15%
 
0% - 15%
 
1.2
%
 
1.8
%
The following specifies the asset allocation ranges and actual allocation as of December 31, 2018 and 2017:
 
 
 
Actual
CRIP
Range
 
2018
 
2017
Canadian Equities
25% - 50%
 
35.7
%
 
35.2
%
International Equities (including U.S. Equities)
0% - 38%
 
15.6
%
 
14.9
%
Fixed Income
40% - 60%
 
48.2
%
 
49.1
%
Money Market
0% - 10%
 
0.5
%
 
0.8
%