LIBBEY INC, 10-K filed on 2/29/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Feb. 22, 2016
Jun. 30, 2015
Entity Information [Line Items]
 
 
 
Entity Registrant Name
LIBBEY INC 
 
 
Entity Central Index Key
0000902274 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
21,765,037 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 882,192,802 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
ASSETS
 
 
Cash and cash equivalents
$ 49,044 
$ 60,044 
Accounts receivable — net
94,379 
91,106 
Inventories — net
178,027 
169,828 
Prepaid and other current assets
19,326 
27,701 
Total current assets
340,776 
348,679 
Pension asset
977 
848 
Purchased intangible assets — net
16,364 
17,771 
Goodwill
164,112 
164,112 
Deferred income taxes
48,662 
5,566 
Other assets
9,019 
7,984 
Total other assets
239,134 
196,281 
Property, plant and equipment — net
272,534 
277,978 
Total assets
852,444 
822,938 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
Accounts payable
71,560 
82,485 
Salaries and wages
27,266 
29,035 
Accrued liabilities
45,179 
42,638 
Accrued income taxes
4,009 
2,010 
Pension liability (current portion)
2,297 
1,488 
Non-pension postretirement benefits (current portion)
4,903 
4,800 
Derivative liability
4,265 
2,653 
Deferred income taxes
3,633 
Long-term debt due within one year
4,747 
7,658 
Total current liabilities
164,226 
176,400 
Long-term debt
426,272 
430,272 
Pension liability
44,274 
56,462 
Non-pension postretirement benefits
55,282 
63,301 
Deferred income taxes
2,822 
5,893 
Other long-term liabilities
11,186 
13,156 
Total liabilities
704,062 
745,484 
Shareholders’ equity:
 
 
Common stock, par value $.01 per share, 50,000,000 shares authorized, 21,843,851 shares issued in 2015 (21,843,851 shares issued in 2014)
218 
218 
Capital in excess of par value
330,756 
331,391 
Treasury stock
(4,448)
(1,060)
Retained deficit
(57,912)
(114,648)
Accumulated other comprehensive loss
(120,232)
(138,447)
Total shareholders’ equity
148,382 
77,454 
Total liabilities and shareholders’ equity
$ 852,444 
$ 822,938 
Consolidated Balance Sheets Parentheticals (USD $)
Dec. 31, 2015
Dec. 31, 2014
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
50,000,000 
50,000,000 
Common stock, shares issued
21,843,851 
21,843,851 
Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net sales
$ 822,345 
$ 852,492 
$ 818,811 
Freight billed to customers
2,885 
3,400 
3,344 
Total revenues
825,230 
855,892 
822,155 
Cost of sales
648,902 
652,747 
632,738 
Gross profit
176,328 
203,145 
189,417 
Selling, general and administrative expenses
132,607 
121,909 
109,981 
Restructuring charges
4,859 
Income from operations
43,721 
81,236 
74,577 
Loss on redemption of debt
(47,191)
(2,518)
Other income
2,880 
2,351 
1,647 
Earnings before interest and income taxes
46,601 
36,396 
73,706 
Interest expense
18,484 
22,866 
32,006 
Income before income taxes
28,117 
13,530 
41,700 
Provision (benefit) for income taxes
(38,216)
8,567 
13,241 
Net income
$ 66,333 
$ 4,963 
$ 28,459 
Net income per share:
 
 
 
Basic
$ 3.04 
$ 0.23 
$ 1.34 
Diluted
$ 2.99 
$ 0.22 
$ 1.31 
Weighted average shares:
 
 
 
Outstanding
21,816,935 
21,716,288 
21,216,780 
Diluted
22,159,149 
22,183,537 
21,742,173 
Dividends declared per share
$ 0.44 
$ 0.00 
$ 0.00 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net income
$ 66,333 
$ 4,963 
$ 28,459 
Other comprehensive income (loss):
 
 
 
Pension and other postretirement benefit adjustments, net of tax
33,201 
(49,725)
60,953 
Change in fair value of derivative instruments, net of tax
(1,235)
(1,846)
732 
Foreign currency translation adjustments
(13,751)
(13,716)
6,195 
Other comprehensive income (loss), net of tax
18,215 
(65,287)
67,880 
Comprehensive income (loss)
$ 84,548 
$ (60,324)
$ 96,339 
Consolidated Statements of Shareholders' Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Stock
Treasury Stock
Capital in Excess of Par Value
Retained Deficit
Accumulated Other Comprehensive Loss (note 14)
Balance, value at Dec. 31, 2012
$ 24,476 
$ 209 
$ 0 
$ 313,377 
$ (148,070)
$ (141,040)
Balance, shares at Dec. 31, 2012
 
20,835,489 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income
28,459 
 
 
 
28,459 
 
Other comprehensive income (loss)
67,880 
 
 
 
 
67,880 
Stock compensation expense (note 12)
5,063 
 
 
5,063 
 
 
Stock issued, value
5,382 
 
5,378 
 
 
Stock issued, shares
 
(480,991)
 
 
 
 
Stock withheld for employee taxes
(451)
 
 
(451)
 
 
Balance value at Dec. 31, 2013
130,809 
213 
323,367 
(119,611)
(73,160)
Balance, shares at Dec. 31, 2013
 
21,316,480 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income
4,963 
 
 
 
4,963 
 
Other comprehensive income (loss)
(65,287)
 
 
 
 
(65,287)
Stock compensation expense (note 12)
3,932 
 
 
3,932 
 
 
Stock issued, value
4,414 
 
4,409 
 
 
Stock issued, shares
 
(527,371)
 
 
 
 
Stock withheld for employee taxes
(317)
 
 
(317)
 
 
Purchase of treasury shares, value
(1,060)
 
(1,060)
 
 
 
Purchase of treasury shares, shares
 
 
34,985 
 
 
 
Balance value at Dec. 31, 2014
77,454 
218 
(1,060)
331,391 
(114,648)
(138,447)
Balance, shares at Dec. 31, 2014
 
21,843,851 
34,985 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income
66,333 
 
 
 
66,333 
 
Other comprehensive income (loss)
18,215 
 
 
 
 
18,215 
Excess tax benefits from share-based compensation arrangements
2,797 
 
 
2,797 
 
 
Stock compensation expense (note 12)
5,873 
 
 
5,873 
 
 
Stock issued, value
3,378 
 
11,887 
(8,509)
 
 
Stock issued, shares
 
 
(336,741)
 
 
 
Stock withheld for employee taxes
(796)
 
 
(796)
 
 
Dividends
(9,597)
 
 
 
(9,597)
 
Purchase of treasury shares, value
(15,275)
 
(15,275)
 
 
 
Purchase of treasury shares, shares
 
 
412,473 
 
 
 
Balance value at Dec. 31, 2015
$ 148,382 
$ 218 
$ (4,448)
$ 330,756 
$ (57,912)
$ (120,232)
Balance, shares at Dec. 31, 2015
 
21,843,851 
110,717 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating activities:
 
 
 
Net income
$ 66,333 
$ 4,963 
$ 28,459 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
42,712 
40,388 
43,969 
Loss on asset sales and disposals
567 
674 
514 
Change in accounts receivable
(6,312)
(1,808)
(12,674)
Change in inventories
(12,006)
(10,828)
(3,932)
Change in accounts payable
(3,466)
5,088 
12,190 
Accrued interest and amortization of discounts and finance fees
1,291 
2,039 
1,496 
Call premium on senior notes
(37,348)
(1,350)
Write-off of finance fees on senior notes
9,086 
1,168 
Pension & non-pension postretirement benefits, net
18,865 
(879)
7,746 
Restructuring
(289)
2,212 
Accrued liabilities & prepaid expenses
4,140 
(7,222)
(17,507)
Income taxes
(45,003)
885 
(1,804)
Share-based compensation expense
5,917 
5,283 
5,063 
Excess tax benefit from share-based compensation, operating
(2,797)
Other operating activities
(4,142)
(2,857)
4,479 
Net cash provided by operating activities
66,099 
81,871 
72,729 
Investing activities:
 
 
 
Additions to property, plant and equipment
(48,136)
(54,393)
(49,407)
Proceeds from furnace malfunction insurance recovery
2,350 
Proceeds from asset sales and other
24 
81 
Net cash used in investing activities
(48,129)
(52,019)
(49,326)
Financing activities:
 
 
 
Borrowings on ABL credit facility
62,900 
83,000 
51,000 
Repayments on ABL credit facility
(62,900)
(83,000)
(51,000)
Other repayments
(3,267)
(5,863)
(14,270)
Other borrowings
5,214 
6,094 
Payments on 6.875% senior notes
(405,000)
(45,000)
Proceeds from Term Loan B
438,900 
Repayments on Term Loan B
(4,400)
(2,200)
Call premium on senior notes
(37,348)
(1,350)
Stock options exercised
3,338 
4,571 
5,384 
Excess tax benefit from share-based compensation arrangements, financing
2,797 
Debt issuance costs and other
(6,959)
Dividends
(9,597)
Treasury shares purchased
(15,275)
(1,060)
Net cash used in financing activities
(26,404)
(9,745)
(49,142)
Effect of exchange rate fluctuations on cash
(2,566)
(2,271)
739 
Increase (decrease) in cash
(11,000)
17,836 
(25,000)
Cash & cash equivalents at beginning of year
60,044 
42,208 
67,208 
Cash & cash equivalents at end of year
49,044 
60,044 
42,208 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid during the year for interest, net of capitalized interest
16,545 
20,302 
30,008 
Cash paid during the year for income taxes
$ 5,516 
$ 7,228 
$ 10,855 
Consolidated Statements of Cash Flows Parentheticals (Libbey Glass, Senior Notes)
May 9, 2014
May 18, 2012
Libbey Glass |
Senior Notes
 
 
Interest rate
6.875% 
6.875% 
Description of the Business
Description of the Business
Description of the Business
Libbey is a leading global manufacturer and marketer of glass tableware products. We produce glass tableware in five countries and sell to customers in over 100 countries. We design and market, under our Libbey®, Crisa®, Royal Leerdam®, World® Tableware, Syracuse® China and Crisal Glass® brand names (among others), an extensive line of high-quality glass tableware, ceramic dinnerware, metal flatware, hollowware and serveware items for sale primarily in the foodservice, retail and business-to-business markets. Our sales force presents our products to the global marketplace in a coordinated fashion. We own and operate two glass tableware manufacturing plants in the United States as well as glass tableware manufacturing plants in the Netherlands (Libbey Holland), Portugal (Libbey Portugal), China (Libbey China) and Mexico (Libbey Mexico). In addition, we import products from overseas in order to complement our line of manufactured items. The combination of manufacturing and procurement allows us to compete in the global tableware market by offering an extensive product line at competitive prices.
Significant Accounting Policies
Significant Accounting Policies
Significant Accounting Policies
Basis of Presentation The Consolidated Financial Statements include Libbey Inc. and its majority-owned subsidiaries (collectively, Libbey or the Company). Our fiscal year end is December 31st. All material intercompany accounts and transactions have been eliminated. The preparation of financial statements and related disclosures in conformity with United States generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ materially from management’s estimates.
Consolidated Statements of Operations Net sales in our Consolidated Statements of Operations include revenue earned when products are shipped and title and risk of loss have passed to the customer. Revenue is recorded net of returns, discounts and incentives offered to customers. Cost of sales includes cost to manufacture and/or purchase products, warehouse, shipping and delivery costs and other costs.

Revenue Recognition Revenue is recognized when products are shipped and title and risk of loss have passed to the customer. Revenue is recorded net of returns, discounts and incentives offered to customers. We estimate returns, discounts and incentives at the time of sale based on the terms of the agreements, historical experience and forecasted sales. We continually evaluate the adequacy of these methods used to estimate returns, discounts and incentives. Taxes collected from customers are excluded from revenues and credited directly to obligations to the appropriate governmental agencies.

Cash and Cash Equivalents We consider all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions.

Accounts Receivable and Allowance for Doubtful Accounts We record trade receivables when revenue is recorded in accordance with our revenue recognition policy and relieve accounts receivable when payments are received from customers. The allowance for doubtful accounts is established through charges to the provision for bad debts. We regularly evaluate the adequacy of the allowance for doubtful accounts based on historical trends in collections and write-offs, our judgment as to the probability of collecting accounts and our evaluation of business risk. This evaluation is inherently subjective, as it requires estimates that are susceptible to revision as more information becomes available. Accounts are determined to be uncollectible when the debt is deemed to be worthless or only recoverable in part and are written off at that time through a charge against the allowance. Generally, we do not require collateral on our accounts receivable.

Inventory Valuation Inventories are valued at the lower of cost or market. The last-in, first-out (LIFO) method is used for our U.S. glass inventories, which represented 32.0 percent and 29.0 percent of our total inventories in 2015 and 2014, respectively. The remaining inventories are valued using either the first-in, first-out (FIFO) or average cost method. For those inventories valued on the LIFO method, the excess of FIFO cost over LIFO, was $12.3 million and $13.6 million in 2015 and 2014, respectively. Cost includes the cost of materials, direct labor, in-bound freight and the applicable share of manufacturing overhead.

Purchased Intangible Assets and Goodwill Financial Accounting Standards Board Accounting Standards Codification™ ("FASB ASC") Topic 350 - "Intangibles-Goodwill and other" ("FASB ASC 350") requires goodwill and purchased indefinite life intangible assets to be reviewed for impairment annually, or more frequently if impairment indicators arise. Intangible assets with lives restricted by contractual, legal or other means will continue to be amortized over their useful lives. As of October 1st of each year, we update our separate impairment evaluations for both goodwill and indefinite life intangible assets. In 2015, 2014 and 2013, our October 1st assessment did not indicate any impairment of goodwill or indefinite life intangibles. There were also no indicators of impairment at December 31, 2015. For further disclosure on goodwill and intangibles, see note 4.

Software We account for software in accordance with FASB ASC 350. Software represents the costs of internally developed and purchased software packages for internal use. Capitalized costs include software packages, installation and/or internal labor costs. These costs generally are amortized over a five-year period.

Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 3 to 14 years for equipment and furnishings and 10 to 40 years for buildings and improvements. Maintenance and repairs are expensed as incurred.
Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Measurement of an impairment loss for long-lived assets that we expect to hold and use is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. See note 5 for further disclosure.
Self-Insurance Reserves Self-insurance reserves reflect the estimated liability for group health and workers' compensation claims not covered by third-party insurance. We accrue estimated losses based on actuarial models and assumptions as well as our historical loss experience. Workers' compensation accruals are recorded at the estimated ultimate payout amounts based on individual case estimates. In addition, we record estimates of incurred-but-not-reported losses based on actuarial models.
Pension and Nonpension Postretirement Benefits We account for pension and nonpension postretirement benefits in accordance with FASB ASC Topic 758 - "Compensation-Retirement Plans" ("FASB ASC 758"). FASB ASC 758 requires recognition of the over-funded or under-funded status of pension and other postretirement benefit plans on the balance sheet. Under FASB ASC 758, gains and losses, prior service costs and credits and any remaining prior transaction amounts that have not yet been recognized through net periodic benefit cost are recognized in accumulated other comprehensive loss, net of tax effect where appropriate.

The U.S. pension plans cover most hourly U.S.-based employees (excluding new hires at Shreveport after 2008 and at Toledo after September 30, 2010) and those salaried U.S.-based employees hired before January 1, 2006. U.S. salaried employees were not eligible for additional company contribution credits after December 31, 2012. The non-U.S. pension plans cover the employees of our wholly-owned subsidiaries in the Netherlands and Mexico. In December 2015, we unwound direct ownership of our defined benefit pension plan in the Netherlands. For further discussion see note 9.

We also provide certain postretirement health care and life insurance benefits covering substantially all U.S. and Canadian salaried employees hired before January 1, 2004 and a majority of our union hourly employees (excluding employees hired at Shreveport after 2008 and at Toledo after September 30, 2010). Employees are generally eligible for benefits upon reaching a certain age and completion of a specified number of years of creditable service. Benefits for most hourly retirees are determined by collective bargaining. Under a cross-indemnity agreement, Owens-Illinois, Inc. assumed liability for the nonpension postretirement benefit of our retirees who had retired as of June 24, 1993. Therefore, the benefits related to these retirees are not included in our liability. For further discussion see note 10.
Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax attribute carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. FASB ASC Topic 740, “Income Taxes,” requires that a valuation allowance be recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are determined separately for each tax paying component in which we conduct our operations or otherwise incur taxable income or losses. For further discussion see note 8.
Derivatives We account for derivatives in accordance with FASB ASC Topic 815 "Derivatives and Hedging" ("FASB ASC 815"). We hold derivative financial instruments to hedge certain of our interest rate risks associated with long-term debt, commodity price risks associated with forecasted future natural gas requirements and foreign exchange rate risks associated with occasional transactions denominated in a currency other than the U.S. dollar. These derivatives (except for the foreign currency contracts and natural gas hedges in Mexico) qualify for hedge accounting since the hedges are highly effective, and we have designated and documented contemporaneously the hedging relationships involving these derivative instruments. While we intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective or if we do not believe that forecasted transactions would occur, the changes in the fair value of the derivatives used as hedges would be reflected in earnings. Cash flows from hedges of debt, short-term forward exchange contracts, currency swaps, interest rate swaps, and natural gas contracts are classified as operating activities. See additional discussion at note 13.
Environmental In accordance with U.S. GAAP accounting standards, we recognize environmental clean-up liabilities on an undiscounted basis when loss is probable and can be reasonably estimated. The cost of the clean-up is estimated by financial and legal specialists based on current law. Such estimates are based primarily upon the estimated cost of investigation and remediation required, and the likelihood that, where applicable, other potentially responsible parties will not be able to fulfill their commitments at the sites where the Company may be jointly and severally liable.
Foreign Currency Translation Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. The effect of exchange rate changes on transactions denominated in currencies other than the functional currency is recorded in other income. Gain (loss) on currency translation was $2.6 million, $1.9 million and $(0.3) million for the years ended December 31, 2015, 2014 and 2013, respectively.
Stock-Based Compensation Expense We account for stock-based compensation expense in accordance with FASB ASC Topic 718, “Compensation — Stock Compensation,” ("FASB ASC 718") and FASB ASC Topic 505-50, “Equity-Based Payments to Non-Employees”("FASB ASC 505-50"). Stock-based compensation cost is measured based on the fair value of the equity instruments issued. FASB ASC Topics 718 and 505-50 apply to all of our outstanding unvested stock-based payment awards.
Treasury Stock Treasury Stock purchases are recorded at cost. During 2015 and 2014, we purchased 412,473 and 34,985 shares of treasury stock at an average price of $37.03 and $30.30, respectively. During 2013, we did not purchase any treasury stock. At December 31, 2015, we had 1,052,542 shares of common stock available for repurchase, as authorized by our Board of Directors.
Research and Development Research and development costs are charged to selling, general and administrative expense in the Consolidated Statements of Operations when incurred. Expenses for 2015, 2014 and 2013, respectively, were $6.1 million, $6.2 million and $3.4 million.
Advertising Costs We expense all advertising costs as incurred. The expenses for 2015, 2014 and 2013, respectively, were $10.7 million, $4.1 million and $3.6 million.
Computation of Income Per Share of Common Stock Basic net income per share of common stock is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share of common stock is computed using the weighted average number of shares of common stock outstanding and dilutive potential common share equivalents during the period.
Reclassifications Certain amounts in prior years' financial statements have been reclassified to conform to the presentation used in the year ended December 31, 2015, including the reclassifications of financing fees in the Consolidated Balance Sheet at December 31, 2014 and segment data.
New Accounting Standards
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, "Revenue From Contracts With Customers" (ASU 2014-09), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This update is effective for interim and annual reporting periods beginning after December 15, 2016; early adoption is not permitted. In August 2015, the FASB issued ASU 2015-14 which defers the effective date one year from January 1, 2017 to January 1, 2018, but early adoption as of January 1, 2017 is permitted. We are currently assessing the impact that this standard will have on our Consolidated Financial Statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements-Going Concern" (ASU 2014-15), which establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. ASU 2014-15 also provides guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. This update is effective for interim and annual reporting periods beginning after December 15, 2016; early adoption is permitted. We are currently evaluating the impact that this standard will have on our Consolidated Financial Statements.

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented in the balance sheet as an asset. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, "Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" (ASU 2015-15), which states that entities may continue presenting unamortized debt issuance costs for line-of-credit arrangements as an asset. ASU 2015-15 is effective immediately. ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015; early adoption is permitted. We adopted ASU 2015-03 and ASU 2015-15 retrospectively in our Consolidated Financial Statements at December 31, 2015. Finance fees related to our Term Loan B are now presented as a deduction against long-term debt while the finance fees related to our ABL Facility are still shown as an other asset. As a result, long-term debt and finance fees within other assets have both decreased by $6.0 million in the Consolidated Balance Sheet at December 31, 2014.

In May 2015, the FASB issued Accounting Standards Update 2015-07, "Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent)" (ASU 2015-07), which removes the requirement to categorize within the fair value hierarchy investments for which fair values are estimated using the net asset value practical expedient provided by FASB ASC Topic 820, Fair Value Measurement. Disclosures about investments in certain entities that calculate net asset value per share are limited under ASU 2015-07 to those investments for which the entity has elected to estimate the fair value using the net asset value practical expedient. ASU 2015-07 is effective for entities for fiscal years beginning after December 15, 2015 and interim periods within, with retrospective application to all periods presented. Early application is permitted. We are currently assessing the impact that this standard will have on our Consolidated Financial Statements.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory" (ASU 2015-11), which requires that inventory be measured at the lower of its cost or the estimated sale price, minus the costs of completing the sale, which the FASB calls the net realizable value. This update is effective for interim and annual reporting periods beginning after December 15, 2016; early adoption is permitted. We are currently evaluating the impact that this standard will have on our Consolidated Financial Statements.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" (ASU 2015-17), which requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This update is effective for interim and annual reporting periods beginning after December 15, 2016 with early adoption permitted. We have adopted ASU 2015-17 at December 31, 2015 to align with the FASB's overall simplification initiative aimed at reducing complexity in accounting standards. As allowed by ASU 2015-17, we have prospectively adopted this standard; thus, prior periods have not been restated.
Balance Sheet Details
Balance Sheet Details
Balance Sheet Details
The following table provides detail of selected balance sheet items:
December 31,
(dollars in thousands)
 
2015
 
2014
Accounts receivable:
 
 
 
 
Trade receivables
 
$
91,324

 
$
87,700

Other receivables
 
3,055

 
3,406

Total accounts receivable, less allowances of $7,066 and $5,586
 
$
94,379

 
$
91,106

 
 
 
 
 
Inventories:
 
 
 
 
Finished goods
 
$
159,998

 
$
151,698

Work in process
 
1,183

 
1,153

Raw materials
 
4,944

 
4,708

Repair parts
 
10,763

 
10,840

Operating supplies
 
1,139

 
1,429

Total inventories, less loss provisions of $5,313 and $4,370
 
$
178,027

 
$
169,828

 
 
 
 
 
Prepaid and other current assets
 
 
 
 
Value added tax
 
$
11,467

 
$
13,512

Prepaid expenses
 
6,310

 
6,947

Deferred income taxes
 

 
4,888

Prepaid income taxes
 
1,304

 
1,951

Derivative asset
 
245

 
403

Total prepaid and other current assets
 
$
19,326

 
$
27,701

 
 
 
 
 
Accrued liabilities:
 
 
 
 
Accrued incentives
 
$
21,450

 
$
17,648

Workers compensation
 
6,700

 
7,121

Medical liabilities
 
4,002

 
3,887

Interest
 
3,808

 
3,876

Commissions payable
 
776

 
1,068

Withholdings and other non-income tax accruals
 
2,184

 
3,078

Other accrued liabilities
 
6,259

 
5,960

Total accrued liabilities
 
$
45,179

 
$
42,638

 
 
 
 
 
Other long-term liabilities:
 
 
 
 
Deferred liability
 
$
7,131

 
$
8,081

Derivative liability
 
315

 
215

Environmental obligation (see note 18)
 
1,085

 
1,000

Other long-term liabilities
 
2,655

 
3,860

Total other long-term liabilities
 
$
11,186

 
$
13,156

Purchased Intangible Assets and Goodwill
Purchased Intangible Assets and Goodwill
Purchased Intangible Assets and Goodwill

Purchased Intangibles

Changes in purchased intangibles balances are as follows:
(dollars in thousands)
 
2015
 
2014
Beginning balance
 
$
17,771

 
$
19,325

Amortization
 
(1,039
)
 
(1,069
)
Foreign currency impact
 
(368
)
 
(485
)
Ending balance
 
$
16,364

 
$
17,771



Purchased intangible assets are composed of the following:
December 31,
(dollars in thousands)
 
2015
 
2014
Indefinite life intangible assets
 
$
11,949

 
$
12,148

Definite life intangible assets, net of accumulated amortization of $16,758 and $15,975
 
4,415

 
5,623

Total
 
$
16,364

 
$
17,771



Amortization expense for definite life intangible assets was $1.0 million, $1.1 million and $1.1 million for years 2015, 2014 and 2013, respectively.

Indefinite life intangible assets are composed of trade names and trademarks that have an indefinite life and are therefore individually tested for impairment on an annual basis, or more frequently in certain circumstances where impairment indicators arise, in accordance with FASB ASC 350. Our measurement date for impairment testing is October 1st of each year. When performing our test for impairment of individual indefinite life intangible assets, we use a relief from royalty method to determine the fair market value that is compared to the carrying value of the indefinite life intangible asset. The inputs used for this analysis are considered as Level 3 inputs in the fair value hierarchy. See note 15 for further discussion of the fair value hierarchy. Our October 1st review for 2015 and 2014 did not indicate impairment of our indefinite life intangible assets. There were also no indicators of impairment at December 31, 2015.

The remaining definite life intangible assets at December 31, 2015 consist of customer relationships that are amortized over a period ranging from 13 to 20 years. The weighted average remaining life on the definite life intangible assets is 4.3 years at December 31, 2015.

Future estimated amortization expense of definite life intangible assets is as follows (dollars in thousands):
2016
2017
2018
2019
2020
 
$1,036
$1,036
$1,036
$556
$150
 


Goodwill

Changes in goodwill balances are as follows:
 
 
2015
 
2014
(dollars in thousands)
 
U.S. & Canada
 
Latin America
 
EMEA
 
Total
 
U.S. & Canada
 
Latin America
 
EMEA
 
Total
Beginning balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
43,872

 
$
125,681

 
$
9,434

 
$
178,987

 
$
43,872

 
$
128,948

 
$
9,434

 
$
182,254

Accumulated impairment losses
 
(5,441
)
 

 
(9,434
)
 
(14,875
)
 
(5,441
)
 

 
(9,434
)
 
(14,875
)
Net beginning balance
 
38,431

 
125,681

 

 
164,112

 
38,431

 
128,948

 

 
167,379

Other
 

 

 

 

 

 
(3,267
)
 

 
(3,267
)
Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
43,872

 
125,681

 
9,434

 
178,987

 
43,872

 
125,681

 
9,434

 
178,987

Accumulated impairment losses
 
(5,441
)
 

 
(9,434
)
 
(14,875
)
 
(5,441
)
 

 
(9,434
)
 
(14,875
)
Net ending balance
 
$
38,431

 
$
125,681

 
$

 
$
164,112

 
$
38,431

 
$
125,681

 
$

 
$
164,112



In 2014, we adjusted goodwill to correct property, plant and equipment acquired in connection with the acquisition of Libbey Mexico. As a result of application of the provisions of FASB ASC Topic 805, Business Combinations, in June 2006, the adjustment should have been reflected in our purchase accounting related to this acquisition. As of December 31, 2014, we decreased goodwill by $3.3 million, increased property, plant and equipment by $4.7 million and recorded a corresponding deferred tax liability of $1.4 million to reflect this adjustment.

Goodwill impairment tests are completed for each reporting unit on an annual basis, or more frequently in certain circumstances where impairment indicators arise. The inputs used for this analysis are considered as Level 2 and Level 3 inputs in the fair value hierarchy. See note 15 for further discussion of the fair value hierarchy.

When performing our test for impairment in 2015, we measured each reporting unit's fair value using a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flow model calculates the fair value of the reporting unit based on a discounted cash flow analysis, incorporating the weighted average cost of capital of a hypothetical third party buyer. Significant estimates in the discounted cash flows model include the following: discount rate, long-term growth rate and profitability of the reporting unit's business, and working capital effects (all Level 3 inputs). The market valuation approach calculates the fair value of the reporting unit based on a comparison of the reporting unit to comparable publicly traded companies. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable multiples in estimating the fair value of the reporting unit (Level 2 inputs). When performing our test for impairment in 2014, we measured each reporting unit's fair value using a discounted cash flow analysis, incorporating the weighted average cost of capital of a hypothetical third party buyer.

The fair value is then compared to the carrying value. To the extent that fair value exceeds the carrying value, no impairment exists. However, to the extent the carrying value exceeds the fair value, we compare the implied fair value of goodwill to its book value to determine if an impairment should be recorded. Our annual review was performed as of October 1st for each year presented, and our review for 2015 and 2014 did not indicate an impairment of goodwill. There were also no indicators of impairment at December 31, 2015.
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment

Property, plant and equipment consists of the following:
December 31,
(dollars in thousands)
 
2015
 
2014
Land
 
$
19,871

 
$
20,353

Buildings
 
102,236

 
97,485

Machinery and equipment
 
470,862

 
448,241

Furniture and fixtures
 
14,313

 
15,431

Software
 
23,630

 
19,950

Construction in progress
 
9,137

 
34,134

Gross property, plant and equipment
 
640,049

 
635,594

Less accumulated depreciation
 
367,515

 
357,616

Net property, plant and equipment
 
$
272,534

 
$
277,978



Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 3 to 14 years for equipment and furnishings and 10 to 40 years for buildings and improvements. Software consists of internally developed and purchased software packages for internal use. Capitalized costs include software packages, installation, and/or certain internal labor costs. These costs are generally amortized over a five-year period. Depreciation expense was $41.4 million, $39.1 million and $42.8 million for the years 2015, 2014 and 2013, respectively.
Borrowings
Borrowings
Borrowings

On April 9, 2014, we completed the refinancing of substantially all of the existing indebtedness of our wholly-owned subsidiaries Libbey Glass and Libbey Europe B.V. The refinancing included:

the entry into an amended and restated credit agreement with respect to our ABL Facility;
the entry into a $440.0 million in aggregate principal amount of Senior Secured Term Loan B of Libbey Glass due 2021 (Term Loan B); and
the repurchase and cancellation of all Libbey Glass's then outstanding $405.0 million in aggregate principal amount Senior Secured Notes ($360.0 million on April 9, 2014 and $45.0 million on May 9, 2014).

We used the proceeds of the Term Loan B, together with cash on hand and borrowings under the ABL Facility, to repurchase $360.0 million of the Senior Secured Notes, redeem the remaining $45.0 million of the Senior Secured Notes, and pay certain related fees and expenses.

The above transactions included charges of $37.3 million for an early call premium and $9.1 million for the write off of the remaining financing fees from the Senior Secured Notes. These charges were considered in the computation of the loss on redemption of debt in the year-ended December 31, 2014.

Borrowings consist of the following:
(dollars in thousands)
 
Interest Rate
 
Maturity Date
 
December 31,
2015
 
December 31,
2014
Borrowings under ABL Facility
 
floating
 
April 9, 2019
 
$

 
$

Term Loan B
 
floating
(1) 
April 9, 2021
 
433,400

 
437,800

RMB Working Capital Loan
 
6.78%
 
July, 2015
 

 
3,258

AICEP Loan
 
0.00%
 
January, 2016 to July 30, 2018
 
3,451

 
3,846

Total borrowings
 
436,851

 
444,904

Less — unamortized discount and finance fees
 
5,832

 
6,974

Total borrowings — net
 
431,019

 
437,930

Less — long term debt due within one year
 
4,747

 
7,658

Total long-term portion of borrowings — net
 
$
426,272

 
$
430,272

___________________________
(1) - See interest rate swap under "Term Loan B" below and note 13.
Annual maturities for all of our total borrowings for the next five years and beyond are as follows:
2016
2017
2018
2019
2020
Thereafter
 
$4,747
$5,031
$6,873
$4,400
$4,400
$411,400
 


Amended and Restated ABL Credit Agreement

Libbey Glass and Libbey Europe entered into an Amended and Restated Credit Agreement, dated as of February 8, 2010 and amended as of April 29, 2011, May 18, 2012 and April 9, 2014 (as amended, the ABL Facility), with a group of four financial institutions. The ABL Facility provides for borrowings of up to $100.0 million, subject to certain borrowing base limitations, reserves and outstanding letters of credit.

All borrowings under the ABL Facility are secured by:
a first-priority security interest in substantially all of the existing and future personal property of Libbey Glass and its domestic subsidiaries (ABL Priority Collateral);
a first-priority security interest in:
100 percent of the stock of Libbey Glass and 100 percent of the stock of substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries;
100 percent of the non-voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries; and
65 percent of the voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries
a first-priority security interest in substantially all proceeds and products of the property and assets described above; and
a second-priority security interest in substantially all of the owned real property, equipment and fixtures in the United States of Libbey Glass and its domestic subsidiaries, subject to certain exceptions and permitted liens (Term Priority Collateral).

Additionally, borrowings by Libbey Europe under the ABL Facility are secured by:
a first-priority lien on substantially all of the existing and future real and personal property of Libbey Europe and its Dutch subsidiaries; and
a first-priority security interest in:
100 percent of the stock of Libbey Europe and 100 percent of the stock of substantially all of the Dutch subsidiaries; and
100 percent (or a lesser percentage in certain circumstances) of the outstanding stock issued by the first-tier foreign subsidiaries of Libbey Europe and its Dutch subsidiaries.
Swingline borrowings are limited to $15.0 million, with swingline borrowings for Libbey Europe being limited to the U.S. equivalent of $7.5 million. Loans comprising each CBFR (CB Floating Rate) Borrowing, including each Swingline Loan, bear interest at the CB Floating Rate plus the Applicable Rate, and euro-denominated swingline borrowings (Eurocurrency Loans) bear interest calculated at the Netherlands swingline rate, as defined in the ABL Facility. The Applicable Rates for CBFR Loans and Eurocurrency Loans vary depending on our aggregate remaining availability. The Applicable Rates for CBFR Loans and Eurocurrency Loans were 0.50 percent and 1.50 percent, respectively, at December 31, 2015. Libbey pays a quarterly Commitment Fee, as defined by the ABL Facility, on the total credit provided under the ABL Facility. The Commitment Fee was 0.25 percent at December 31, 2015. No compensating balances are required by the ABL Facility. The ABL Facility does not require compliance with a fixed charge coverage ratio covenant, unless aggregate unused availability falls below $10.0 million. If our aggregate unused ABL availability were to fall below $10.0 million, the fixed charge coverage ratio requirement would be 1:00 to 1:00. Libbey Glass and Libbey Europe have the option to increase the ABL Facility by $25.0 million. There were no Libbey Glass or Libbey Europe borrowings under the facility at December 31, 2015 or at December 31, 2014. Interest is payable on the last day of the interest period, which can range from one month to six months depending on the maturity of each individual borrowing on the ABL facility.

The borrowing base under the ABL Facility is determined by a monthly analysis of the eligible accounts receivable and inventory. The borrowing base is the sum of (a) 85 percent of eligible accounts receivable and (b) the lesser of (i) 85 percent of the net orderly liquidation value (NOLV) of eligible inventory, (ii) 65 percent of eligible inventory, or (iii) $75.0 million.

At December 31, 2015, the available total borrowing base is offset by a $0.3 million rent reserve and a $2.1 million mark-to-market reserve for natural gas contracts. The ABL Facility also provides for the issuance of up to $30.0 million of letters of credit, which are applied against the $100.0 million limit; at December 31, 2015, $6.6 million in letters of credit were outstanding. Remaining unused availability under the ABL Facility was $91.0 million at December 31, 2015, compared to $82.3 million under the ABL Facility at December 31, 2014.
Term Loan B
On April 9, 2014, Libbey Glass consummated its $440.0 million Term Loan B. The net proceeds of the Term Loan B were $438.9 million, after the 0.25 percent original issue discount of $1.1 million. The Term Loan B had related fees of approximately $6.7 million that will be amortized to interest expense over the life of the loan.

The Term Loan B is evidenced by a Senior Secured Credit Agreement, dated April 9, 2014 (Credit Agreement), between Libbey Glass, the Company, the domestic subsidiaries of Libbey Glass listed as guarantors therein (Subsidiary Guarantors and together with the Company, Guarantors), and the lenders. Under the terms of the Credit Agreement, aggregate principal of $1.1 million is due on the last business day of each quarter. The Term Loan B bears interest at the rate of LIBOR plus 3.0 percent, subject to a LIBOR "floor" of 0.75 percent. The interest rate was 3.75 percent per year at December 31, 2015 and 2014, and will mature on April 9, 2021. Although the Credit Agreement does not contain financial covenants, the Credit Agreement contains other covenants that restrict the ability of Libbey Glass and the Guarantors to, among other things:

incur, assume or guarantee additional indebtedness;
pay dividends, make certain investments or other restricted payments;
create liens;
enter into affiliate transactions;
merge or consolidate, or otherwise dispose of all or substantially all the assets of Libbey Glass and the Guarantors; and
transfer or sell assets.

We may voluntarily prepay, in whole or in part, the Term Loan B without premium or penalty but with accrued interest. Beginning with the year-ended December 31, 2015, the Credit Agreement requires us to make an annual mandatory prepayment offer to lenders of 0.0 to 50.0 percent of our excess cash flow, depending on our excess cash flow and leverage ratios as defined in the Credit Agreement. The calculation is made at the end of each year and the mandatory prepayment offer to lenders is made no later than ten business days after the filing of our annual compliance certificate to the lenders. The amount of any required mandatory prepayment offer is reduced by the amounts of any optional prepayments we made during the applicable year or prior to the prepayment offer in the year the offer is required to be made.

The Credit Agreement provides for customary events of default. In the case of an event of default as defined in the Credit Agreement, all of the outstanding Term Loan B will become due and payable immediately without further action or notice. The Term Loan B and the related guarantees under the Credit Agreement are secured by (i) first priority liens on the Term Priority Collateral and (ii) second priority liens on the ABL Collateral.

On April, 1, 2015, we executed an interest rate swap on our Term Loan B as part of our risk management strategy to mitigate the risks involved with fluctuating interest rates. The interest rate swap will effectively convert $220.0 million of our Term Loan B debt from a variable interest rate to a 4.85 percent fixed interest rate, thus reducing the impact of interest rate changes on future income. The fixed rate swap is effective January 2016 through January 2020. The interest rate swap is designated as a cash flow hedge and is accounted for under FASB ASC 815 "Derivatives and Hedging". See note 13 for further discussion on the interest rate swap.
Senior Secured Notes
The 6.875 percent Senior Secured Notes were issued at par and had related fees of approximately $13.2 million. These fees were amortized to interest expense over the life of the notes until the notes were refinanced in 2014. The Senior Secured Notes were issued pursuant to an Indenture, dated May 18, 2012 (Notes Indenture), between Libbey Glass, the Company, the domestic subsidiaries of Libbey Glass listed as guarantors therein (Subsidiary Guarantors and together with the Company, Guarantors), and The Bank of New York Mellon Trust Company, N.A., as trustee (Notes Trustee) and collateral agent.

Prior to May 15, 2015, but not more than once in any twelve-month period, we were able to redeem up to 10 percent of the Senior Secured Notes at a redemption price of 103 percent. On May 7, 2013, Libbey Glass redeemed an aggregate principal amount of $45.0 million of the Senior Secured Notes in accordance with the terms of the Notes Indenture. Pursuant to the terms of the Notes Indenture, the redemption price for the Senior Secured Notes was 103 percent of the principal amount of the redeemed Senior Secured Notes, plus accrued and unpaid interest. In conjunction with this redemption, we recorded $2.5 million of expense, representing $1.3 million for an early call premium and $1.2 million for the write off of a pro rata amount of financing fees.

We had an interest rate agreement in place through May 9, 2014 with respect to $45.0 million of our Senior Secured Notes as a means to manage our fixed to variable interest rate ratio. The interest rate agreement effectively converted this portion of our long-term borrowings from fixed rate debt to variable rate debt. The variable interest rate for our borrowings related to the agreement at May 9, 2014, excluding applicable fees, was 5.5 percent. Total remaining Senior Secured Notes not covered by the interest rate agreement had a fixed interest rate of 6.875 percent per year. We settled the swap at fair value, resulting in a payment of $1.1 million on May 13, 2014. Upon the redemption of the Senior Secured Notes, the unamortized balance of $0.8 million of the carrying value adjustment on debt related to the interest rate agreement was recognized as expense in loss on redemption of debt on the Consolidated Statements of Operations. See note 13 for further discussion and the net impact recorded on the Consolidated Statements of Operations.
AICEP Loan
In July 2012, Libbey Portugal entered into a loan agreement with Agencia para Investmento Comercio Externo de Portugal, EPE (AICEP), the Portuguese Agency for investment and external trade. The amount of the loan is €3.2 million (approximately $3.5 million) at December 31, 2015 and has an interest rate of 0.0 percent. Semi-annual installments of principal are due beginning in January 2016 through the maturity date in July 2018.
RMB Working Capital Loan
On September 2, 2013, Libbey China entered into a RMB 31.5 million (approximately $5.2 million) working capital loan with China Construction Bank (CCB) to cover seasonal working capital needs. The 364-day loan was set to mature on September 1, 2014, and had a variable interest rate as announced by the People's Bank of China. On July 14, 2014, Libbey China prepaid the working capital loan along with accrued and unpaid interest. The loan held an annual interest rate of 6.3 percent at the repayment date. This obligation was secured by a mortgage lien on the Libbey China facility.

On July 24, 2014, Libbey China entered into a RMB 20.0 million (approximately $3.3 million) working capital loan with CCB to cover seasonal working capital needs. The working capital loan was set to mature on July 23, 2015, and had a fixed interest rate of 6.78 percent, which was paid monthly. On March 4, 2015, Libbey China prepaid the working capital loan along with accrued and unpaid interest. This obligation was secured by a mortgage lien on the Libbey China facility.
RMB Loan Contract
On January 23, 2006, Libbey Glassware (China) Co., Ltd. (Libbey China), an indirect wholly owned subsidiary of Libbey Inc., entered into an eight-year RMB Loan Contract (RMB Loan Contract) with China Construction Bank Corporation Langfang Economic Development Area Sub-Branch (CCB). Pursuant to the RMB Loan Contract, CCB agreed to lend to Libbey China RMB 250.0 million, or the equivalent of approximately $40.9 million, for the construction of our production facility in China and the purchase of related equipment, materials and services. The obligations of Libbey China were secured by a guarantee executed by Libbey Inc. for the benefit of CCB and a mortgage lien on the Libbey China facility. The loan held a variable interest rate as announced by the People’s Bank of China. Interest with respect to the loan was paid quarterly. In 2013, Libbey China repaid the final RMB 60.0 million (approximately $9.5 million) due on the loan.
BES Euro Line
In January 2007, Crisal entered into a seven-year, €11.0 million line of credit (approximately $15.1 million) with Banco Espírito Santo, S.A. (BES). On August 14, 2013, Libbey Portugal paid in full the final €3.3 million (approximately $4.5 million) principal payment along with accrued and unpaid interest on its BES Euro Line, which was scheduled to expire in December 2013.
Promissory Note
In September 2001, we issued a $2.7 million promissory note at an interest rate of 6.0 percent in connection with the purchase of our Laredo, Texas warehouse facility. On December 10, 2014, we paid in full the remaining principal and unpaid interest due on the note, totaling $0.4 million. Principal and interest with respect to the promissory note were paid monthly.
Notes Payable
We have an overdraft line of credit for a maximum of €0.8 million. At December 31, 2015 and 2014, there were no borrowings under the facility, which had an interest rate of 5.80 percent. Interest with respect to the note is paid monthly.
Fair Value of Borrowings
The fair value of our debt has been calculated based on quoted market prices (Level 2 in the fair value hierarchy) for the same or similar issues. The Term Loan B had an estimated fair value of $425.8 million at December 31, 2015 and $430.1 million at December 31, 2014. The fair value of the other immaterial debt approximates carrying value at December 31, 2015. The fair value of the remainder of our debt at December 31, 2014 approximates carrying value due to the short term nature of the RMB Working Capital Loan and other immaterial debt.
Capital Resources and Liquidity
Historically, cash flows generated from operations, cash on hand and our borrowing capacity under our ABL Facility have enabled us to meet our cash requirements, including capital expenditures and working capital requirements. Under the ABL Facility at December 31, 2015, we had no borrowings, issued letters of credit of $6.6 million, and had $0.3 million in rent reserves and $2.1 million in mark-to-market reserves for natural gas contracts. As a result, we had $91.0 million of unused availability. In addition, we had $49.0 million of cash on hand at December 31, 2015, compared to $60.0 million of cash on hand at December 31, 2014.
Restructuring Charges
Restructuring Charges
Restructuring Charges

Capacity Realignment

In February 2013, we announced plans to discontinue production of certain glassware in North America and reduce manufacturing capacity at our Shreveport, Louisiana, manufacturing facility. As a result, on May 30, 2013, we ceased production of certain glassware in North America, discontinued the use of a furnace at our Shreveport, Louisiana, manufacturing plant and began relocating a portion of the production from the idled furnace to our Toledo, Ohio, and Monterrey, Mexico, locations. In connection with this plan, we incurred pretax charges of approximately $7.5 million. For the year end December 31, 2014 and 2013, we recorded a pretax charge of $1.0 million and $6.5 million, respectively. These charges included employee termination costs, fixed asset impairment charges, depreciation expense and other restructuring expenses. Employee termination costs include severance, medical benefits and outplacement services for the terminated employees. The write-down of fixed assets was to adjust certain machinery and equipment to the estimated fair market value. These activities are within the U.S. and Canada and Latin America segments and were completed by March 31, 2014.

The following table summarizes the pretax charges incurred in 2014 and 2013:
 
 
2014
 
2013
 
 
(dollars in thousands)
 
Latin America
 
U.S. & Canada
 
Total Charges to Date
Accelerated depreciation
 
$

 
$
1,699

 
$
1,699

Other restructuring expenses
 
985

 
(14
)
 
971

Included in cost of sales
 
985

 
1,685

 
2,670

 
 
 
 
 
 
 
Employee termination cost & other
 

 
1,794

 
1,794

Fixed asset write-down
 

 
1,924

 
1,924

Other restructuring expenses
 

 
1,141

 
1,141

Included in restructuring charges
 

 
4,859

 
4,859

Total pretax charge
 
$
985

 
$
6,544

 
$
7,529


The following is the capacity realignment reserve activity for the year ended December 31, 2014:
(dollars in thousands)
 
Reserve
Balance at
January 1, 2014
 
Total
Charge to Earnings
 
Cash
(payments) receipts
 
Non-cash Utilization
 
Reserve
Balance at
December 31, 2014
Employee termination cost & other
 
$
289

 
$

 
$
(289
)
 
$

 
$

Other restructuring expenses
 

 
985

 
(985
)
 

 

Total
 
$
289

 
$
985

 
$
(1,274
)
 
$

 
$

Income Taxes
Income Taxes
Income Taxes

The provisions for income taxes were calculated based on the following components of income (loss) before income taxes:
Year ended December 31,
(dollars in thousands)
 
2015
 
2014
 
2013
United States
 
$
27,146

 
$
(15,488
)
 
$
23,211

Non-U.S. 
 
971

 
29,018

 
18,489

Total income before income taxes
 
$
28,117

 
$
13,530

 
$
41,700



The current and deferred provisions (benefit) for income taxes were:
Year ended December 31,
(dollars in thousands)
 
2015
 
2014
 
2013
Current:
 
 
 
 
 
 
U.S. federal
 
$
300

 
$
59

 
$
988

Non-U.S. 
 
9,142

 
10,180

 
8,548

U.S. state and local
 
162

 
157

 
617

Total current income tax provision (benefit)
 
9,604

 
10,396

 
10,153

 
 
 
 
 
 
 
Deferred:
 
 
 
 
 
 
U.S. federal
 
(44,068
)
 
227

 
564

Non-U.S. 
 
(3,078
)
 
(2,066
)
 
2,517

U.S. state and local
 
(674
)
 
10

 
7

Total deferred income tax provision (benefit)
 
(47,820
)
 
(1,829
)
 
3,088

 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
U.S. federal
 
(43,768
)
 
286

 
1,552

Non-U.S. 
 
6,064

 
8,114

 
11,065

U.S. state and local
 
(512
)
 
167

 
624

Total income tax provision (benefit)
 
$
(38,216
)
 
$
8,567

 
$
13,241



Deferred income tax assets and liabilities result from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and from income tax carryovers and credits. The significant components of our deferred income tax assets and liabilities are as follows:
December 31,
(dollars in thousands)
 
2015
 
2014
Deferred income tax assets:
 
 
 
 
Pension
 
$
9,644

 
$
12,317

Non-pension postretirement benefits
 
21,751

 
24,326

Other accrued liabilities
 
20,432

 
18,726

Receivables
 
2,341

 
1,798

Net operating loss and charitable contribution carry forwards
 
25,754

 
33,531

Tax credits
 
10,245

 
10,320

Total deferred income tax assets
 
90,167

 
101,018

 
 
 
 
 
Deferred income tax liabilities:
 
 
 
 
Property, plant and equipment
 
22,882

 
20,986

Inventories
 
2,378

 
5,037

Intangibles and other
 
7,883

 
7,581

Total deferred income tax liabilities
 
33,143

 
33,604

Net deferred income tax asset before valuation allowance
 
57,024

 
67,414

Valuation allowance
 
(11,184
)
 
(66,486
)
Net deferred income tax asset (liability)
 
$
45,840

 
$
928



At December 31, 2015, we have prospectively adopted ASU 2015-17 which requires that deferred tax assets and liabilities be classified as non-current in the statement of financial position. The net deferred income tax assets and liabilities at December 31 of the respective year-ends were included in the Consolidated Balance Sheets as follows:
December 31,
(dollars in thousands)
 
2015
 
2014
Current deferred income tax asset
 
$

 
$
4,888

Non-current deferred income tax asset
 
48,662

 
5,566

Current deferred income tax liability
 

 
(3,633
)
Non-current deferred income tax liability
 
(2,822
)
 
(5,893
)
Net deferred income tax asset (liability)
 
$
45,840

 
$
928



The 2015 deferred income tax asset for net operating loss carry forwards of $25.5 million relates to cumulative pre-tax losses incurred in the Netherlands of $16.9 million, in Portugal of $1.8 million, in China of $1.3 million, and in the U.S. of $53.8 million for federal and $68.5 million for state and local jurisdictions. Our foreign net operating loss carry forwards of $20.0 million will expire between 2016 and 2027. Our U.S. federal net operating loss carry forward of $53.8 million will expire between 2031 and 2034. This amount is lower than the actual amount reported on our U.S. federal income tax return by $7.4 million. The difference is attributable to tax deductions in excess of financial statement amounts for stock based compensation. When these amounts are realized, we will record a credit to additional paid in capital. The U.S. state and local net operating loss carry forward of $68.5 million will expire between 2016 and 2034. The 2014 deferred income tax asset for net operating loss carry forwards of $33.5 million related to pre-tax losses incurred in the Netherlands of $10.3 million, in Portugal of $4.2 million, in China of $2.9 million, and in the U.S. of $75.6 million for federal and $99.1 million for state and local jurisdictions.

The 2015 deferred tax credits of $10.2 million consist of $2.6 million U.S. federal tax credits and $7.6 million non-U.S. credits. The U.S. federal tax credits consist of $2.0 million of general business research and development credits which will expire between 2024 and 2035 and $0.6 million of alternative minimum tax credits which do not expire. The non-U.S. credit of $7.6 million, which is related to withholding tax on inter-company debt in the Netherlands, can be carried forward indefinitely. The 2014 deferred tax credits of $10.3 million consisted of $2.3 million U.S. federal tax credits and $8.0 million non-U.S. credits.

In assessing the need for a valuation allowance, management considers on a quarterly basis whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income (including reversals of deferred income tax liabilities) during the periods in which those deductible temporary differences reverse. As a result, we consider the historical and projected financial results of the tax paying component recording the net deferred income tax asset as well as all other positive and negative evidence. Examples of the evidence we consider are cumulative losses in recent years, losses expected in early future years, a history of potential tax benefits expiring unused and whether there were unusual, infrequent, or extraordinary items to be considered. We currently have valuation allowances in place on our deferred income tax assets in Portugal and the Netherlands. We intend to maintain these allowances until a period of sustainable income is achieved and management concludes it is more likely than not that those deferred income tax assets will be realized.

As of December 31, 2015, management has considered the evidence, both positive and negative, in assessing the realizability of our deferred tax assets in the U.S. The positive evidence, including achievement of cumulative income in recent years and expectations for sustainable future income, was strong enough to conclude that it is more likely than not that nearly all of our deferred tax assets are realizable and the valuation allowance was reduced accordingly.

Our European operations in the Netherlands and Portugal incurred operating losses in 2015, continue to be in cumulative loss positions in recent years, and have tax loss carry-forwards expiring unused. In addition, European economic conditions continue to be unfavorable. Accordingly, management believes it is not more likely than not that the deferred tax assets related to these operations will be realized and valuation allowances continue to be recorded for the Netherlands and Portugal as of December 31, 2015.

The valuation allowance activity for the years ended December 31 is as follows:
Year ended December 31,
(dollars in thousands)
 
2015
 
2014
 
2013
Beginning balance
 
$
66,486

 
$
46,048

 
$
77,629

Charge (benefit) to provision for income taxes
 
(49,877
)
 
3,507

 
(9,302
)
Charge (benefit) to other comprehensive income
 
(5,425
)
 
16,931

 
(22,279
)
Ending balance
 
$
11,184

 
$
66,486

 
$
46,048



The valuation allowance decreased $55.3 million in 2015 from $66.5 million at December 31, 2014 to $11.2 million at December 31, 2015. The 2015 decrease of $55.3 million is primarily attributable to the reversal of substantially all of the U.S. valuation allowance, partially offset by changes in deferred tax assets in foreign jurisdictions where full valuation allowances are recorded. The 2015 valuation allowance of $11.2 million consists of $0.1 million related to U.S. foreign tax credits and $11.1 million related primarily to net operating losses and foreign tax credits in the Netherlands and Portugal. The valuation allowance increased $20.4 million in 2014 from $46.0 million at December 31, 2013 to $66.5 million at December 31, 2014. The 2014 increase of $20.4 million was attributable to the 2014 change in deferred tax assets, primarily related to the U.S. operating loss and other comprehensive losses related to pensions. The 2013 decrease in valuation allowance of $31.6 million was attributable to the 2013 change in deferred tax assets, primarily related to the U.S. federal net operating loss carry forward and pension.

Reconciliation from the statutory U.S. federal income tax rate to the consolidated effective income tax rate was as follows:
Year ended December 31,
 
2015
 
2014
 
2013
Statutory U.S. federal income tax rate
 
35.0

%
 
35.0

%
 
35.0

%
Increase (decrease) in rate due to:
 
 
 
 
 
 
 
 
 
Non-U.S. income tax differential
 
(0.9
)
 
 
(25.9
)
 
 
(6.4
)
 
U.S. state and local income taxes, net of related U.S. federal income taxes
 
(2.0
)
 
 
0.8

 
 
1.0

 
Permanent adjustments
 
7.5

 
 
20.1

 
 
0.1

 
Foreign withholding taxes
 
4.7

 
 
14.8

 
 
4.8

 
Valuation allowance
 
(174.8
)
 
 
42.9

 
 
(16.8
)
 
Unrecognized tax benefits
 
(0.3
)
 
 
(9.3
)
 
 
(0.7
)
 
Impact of foreign exchange
 
(19.8
)
 
 
(14.0
)
 
 
2.6

 
Tax effect of intercompany capitalization
 
11.7

 
 

 
 

 
Impact of legislative changes
 

 
 

 
 
10.2

 
Other
 
3.0

 
 
(1.1
)
 
 
2.0

 
Consolidated effective income tax rate
 
(135.9
)
%
 
63.3

%
 
31.8

%


U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside of the United States. This amount becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary differences totaled $35.0 million as of December 31, 2015 and $33.5 million as of December 31, 2014. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

We are subject to income taxes in the U.S. and various foreign jurisdictions. Management judgment is required in evaluating our tax positions and determining our provision for income taxes. Throughout the course of business, there are numerous transactions and calculations for which the ultimate tax determination is uncertain. When management believes uncertain tax positions may be challenged despite our belief that the tax return positions are supportable, we record unrecognized tax benefits as liabilities in accordance with the requirements of ASC 740. When our judgment with respect to these uncertain tax positions changes as a result of a change in facts and circumstances, such as the outcome of a tax audit, we adjust these liabilities through increases or decreases to the income tax provision.

A reconciliation of the beginning and ending gross unrecognized tax benefits, excluding interest and penalties, is as follows:
(dollars in thousands)
 
2015
 
2014
 
2013
Beginning balance
 
$
378

 
$
1,312

 
$
1,496

Additions based on tax positions related to the current year
 
293

 

 
325

Reductions for tax positions of prior years
 

 
(325
)
 

Changes due to lapse of statute of limitations
 
(240
)
 
(609
)
 
(509
)
Ending balance
 
$
431

 
$
378

 
$
1,312



We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes. Other disclosures relating to unrecognized tax benefits are as follows:
December 31,
(dollars in thousands)
 
2015
 
2014
 
2013
Impact on the effective tax rate, if unrecognized tax benefits were recognized
 
$
378

 
$
306

 
$
1,198

Interest and penalties, net of tax benefit, accrued in the Consolidated Balance Sheets
 
$
28

 
$
174

 
$
537

Interest and penalties expense (benefit) recognized in the Consolidated Statements of Operations
 
$
(146
)
 
$
(363
)
 
$
(124
)


Based upon the outcome of tax examinations, judicial proceedings, or expiration of statutes of limitations, it is reasonably possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities. It is also reasonably possible that gross unrecognized tax benefits related to U.S. exposures may decrease within the next twelve months by approximately $0.1 million due to expiration of statutes of limitations.

We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. As of December 31, 2015, the tax years that remained subject to examination by major tax jurisdictions were as follows:
Jurisdiction
 
Open Years
Canada
 
2011
2015
China
 
2012
2015
Mexico
 
2010
2015
Netherlands
 
2014
2015
Portugal
 
2008
2015
United States (excluding 2009 which is closed)
 
2008
2015
Pension
Pension
Pension
We have pension plans covering the majority of our employees. Benefits generally are based on compensation and service for salaried employees and job grade and length of service for hourly employees. In addition, we have an unfunded supplemental employee retirement plan (SERP) that covers salaried U.S.-based employees of Libbey hired before January 1, 2006. The U.S. pension plans cover the salaried U.S.-based employees of Libbey hired before January 1, 2006 and most hourly U.S.-based employees (excluding employees hired at Shreveport after 2008 and at Toledo after September 30, 2010). Effective January 1, 2013, we ceased annual company contribution credits to the cash balance accounts in our Libbey U.S. Salaried Pension Plan and SERP. The non-U.S. pension plans cover the employees of our wholly owned subsidiaries in the Netherlands and Mexico. The plan in Mexico is primarily unfunded.
 
In the fourth quarter of 2015, we executed an agreement with Pensioenfonds voor de Grafische Bedrijven (“PGB”), an industry wide pension fund, and unwound direct ownership of our defined benefit pension plan in the Netherlands. In accordance with this agreement, we transferred all assets of the plan and made a cash contribution of $5.2 million to PGB. In return, PGB assumed the related liabilities and administrative responsibilities of the plan. As a result, there is no longer a pension liability on the Consolidated Balance Sheet at December 31, 2015. This event also resulted in a settlement charge of $21.6 million being recorded in the Consolidated Statement of Operations in the fourth quarter of 2015. Beginning in 2016, Libbey Holland will continue to make cash contributions to PGB as participating employees earn pension benefits. These related costs will be expensed as incurred, similar to the accounting associated with a defined contribution retirement plan.

Effect on Operations
The components of our net pension expense, including the SERP, are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Service cost (benefits earned during the period)
 
$
4,365

 
$
3,664

 
$
4,739

 
$
2,965

 
$
2,264

 
$
2,862

 
$
7,330

 
$
5,928

 
$
7,601

Interest cost on projected benefit obligation
 
14,715

 
15,378

 
14,093

 
4,332

 
5,566

 
4,981

 
19,047

 
20,944

 
19,074

Expected return on plan assets
 
(22,661
)
 
(22,387
)
 
(22,374
)
 
(2,447
)
 
(2,447
)
 
(1,995
)
 
(25,108
)
 
(24,834
)
 
(24,369
)
Amortization of unrecognized:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service cost
 
417

 
1,059

 
1,172

 
(244
)
 
164

 
164

 
173

 
1,223

 
1,336

Actuarial loss
 
7,291

 
4,057

 
8,604

 
1,599

 
1,012

 
919

 
8,890

 
5,069

 
9,523

Transition obligations
 

 

 

 

 
60

 
84

 

 
60

 
84

Settlement charge
 
13

 
483

 
1,805

 
21,574

 
291

 
447

 
21,587

 
774

 
2,252

Curtailment charge (credit)
 

 

 

 
(14
)
 

 

 
(14
)
 

 

Pension expense
 
$
4,140

 
$
2,254

 
$
8,039

 
$
27,765

 
$
6,910

 
$
7,462

 
$
31,905

 
$
9,164

 
$
15,501



In 2015, 2014 and 2013, we incurred pension settlement charges of $21.6 million, $0.8 million and $2.3 million, respectively. The pension settlement charges in 2015 were triggered primarily by the liquidation of the Dutch pension fund in 2015. The pension settlement charges in 2014 and 2013 were triggered by excess lump sum distributions taken by employees, which required us to record unrecognized gains and losses in our pension plan accounts.

Actuarial Assumptions

The assumptions used to determine the benefit obligations were as follows:
 
 
U.S. Plans
 
Non-U.S. Plans
 
 
2015
 
2014
 
2015
 
2014
Discount rate
 
4.60%
to
4.73%
 
4.17%
to
4.29%
 
8.10%
 
2.30%
to
7.60%
Rate of compensation increase
 
—%
 
—%
 
4.30%
 
2.00%
to
4.30%

The assumptions used to determine net periodic pension costs were as follows:
 
U.S. Plans
 
Non-U.S. Plans
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Discount rate
4.17
%
to
4.29
%
 
4.83
%
to
5.12
%
 
3.98
%
to
4.97
%
 
2.30
%
to
7.60
%
 
3.70
%
to
8.50
%
 
3.70
%
to
7.00
%
Expected long-term rate of return on plan assets
7.25%
 
7.25%
 
7.50%
 
4.00%
 
4.10%
 
3.60%
Rate of compensation increase
—%
 
—%
 
—%
 
2.00
%
to
4.30
%
 
2.00
%
to
4.30
%
 
2.00
%
to
4.30
%


The discount rate enables us to estimate the present value of expected future cash flows on the measurement date. The rate used reflects a rate of return on high-quality fixed income investments that match the duration of expected benefit payments at our December 31 measurement date. The discount rate at December 31 is used to measure the year-end benefit obligations and the earnings effects for the subsequent year. A higher discount rate decreases the present value of benefit obligations and decreases pension expense.

To determine the expected long-term rate of return on plan assets for our funded plans, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. The expected long-term rate of return on plan assets at December 31st is used to measure the earnings effects for the subsequent year.

Future benefits are assumed to increase in a manner consistent with past experience of the plans except for the Libbey U.S. Salaried Pension Plan and SERP as discussed above, which, to the extent benefits are based on compensation, includes assumed compensation increases as presented above. Amortization included in net pension expense is based on the average remaining service of employees.

We account for our defined benefit pension plans on an expense basis that reflects actuarial funding methods. The actuarial valuations require significant estimates and assumptions to be made by management, primarily with respect to the discount rate and expected long-term return on plan assets. These assumptions are all susceptible to changes in market conditions. The discount rate is based on a selected settlement portfolio from a universe of high quality bonds. In determining the expected long-term rate of return on plan assets, we consider historical market and portfolio rates of return, asset allocations and expectations of future rates of return. We evaluate these critical assumptions on our annual measurement date of December 31st. Other assumptions involving demographic factors such as retirement age, mortality and turnover are evaluated periodically and are updated to reflect our experience. Actual results in any given year often will differ from actuarial assumptions because of demographic, economic and other factors.

During 2014, the Society of Actuaries released a new mortality table, which is believed to better reflect current mortality expectations and is to be used in calculating pension obligations. In 2014, we adopted these new tables for our U.S. pension plans for use in determining our projected benefit obligations. Adoption of the new mortality tables increased our projected benefit obligation by approximately $22.1 million at December 31, 2014. In 2015, the Society of Actuaries published a new mortality projection scale which reflected two additional years of mortality experience. We adopted this 2015 update.

Projected Benefit Obligation (PBO) and Fair Value of Assets

The changes in the projected benefit obligations and fair value of plan assets are as follows:
Year ended December 31,
(dollars in thousands)
 
U.S. Plans
 
Non-U.S. Plans
 
Total
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Change in projected benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation, beginning of year
 
$
351,477

 
$
310,109

 
$
119,986

 
$
102,719

 
$
471,463

 
$
412,828

Service cost
 
4,365

 
3,664

 
2,965

 
2,264

 
7,330

 
5,928

Interest cost
 
14,715

 
15,378

 
4,332

 
5,566

 
19,047

 
20,944

Exchange rate fluctuations
 

 

 
(13,948
)
 
(14,668
)
 
(13,948
)
 
(14,668
)
Actuarial (gain) loss
 
(26,796
)
 
51,066

 
11,105

 
28,051

 
(15,691
)
 
79,117

Plan participants' contributions
 

 

 
1,359

 
1,249

 
1,359

 
1,249

Plan amendments
 

 

 
(4,354
)
 
(780
)
 
(4,354
)
 
(780
)
Curtailment effect
 

 

 
(7,414
)
 

 
(7,414
)
 

Settlements paid
 
(96
)
 
(12,825
)
 
(74,485
)
 

 
(74,581
)
 
(12,825
)
Benefits paid
 
(17,802
)
 
(15,915
)
 
(3,631
)
 
(4,415
)
 
(21,433
)
 
(20,330
)
Projected benefit obligation, end of year
 
$
325,863

 
$
351,477

 
$
35,915

 
$
119,986

 
$
361,778

 
$
471,463

Change in fair value of plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets, beginning of year
 
$
340,082