EMPLOYEE BENEFIT PLANS (Tables)
|
12 Months Ended |
Dec. 31, 2015 |
|---|
| Description of New Accounting Pronouncements Recently Adopted |
|
| Schedule of funded status of the Plans |
| December 31, |
|
2015 |
|
2014 |
| (in thousands) |
|
|
|
|
| CHANGE IN ACCUMULATED BENEFIT OBLIGATION |
|
|
|
|
|
|
|
|
| Accumulated Benefit obligation at beginning of year |
|
$ |
221,721 |
|
|
$ |
185,947 |
|
| Service cost |
|
|
86 |
|
|
|
74 |
|
| Interest cost |
|
|
8,915 |
|
|
|
9,427 |
|
| Actuarial (gain) loss |
|
|
(20,283 |
) |
|
|
42,056 |
|
| Benefits paid |
|
|
(10,064 |
) |
|
|
(15,783 |
) |
| Accumulated Benefit obligation at end of year |
|
|
200,375 |
|
|
|
221,721 |
|
| CHANGE IN PLAN ASSETS |
|
|
|
|
|
|
|
|
| Market value of plan assets at beginning of year |
|
|
192,163 |
|
|
|
192,368 |
|
| Actual return on plan assets |
|
|
3,541 |
|
|
|
10,328 |
|
| Employer contribution |
|
|
5,000 |
|
|
|
5,250 |
|
| Benefits paid |
|
|
(10,064 |
) |
|
|
(15,783 |
) |
| Fair value of plan assets at end of year |
|
|
190,640 |
|
|
|
192,163 |
|
| Funded status |
|
$ |
(9,735 |
) |
|
$ |
(29,558 |
) |
|
| Schedule of amounts recognized in the statement of financial position |
| December 31, |
|
2015 |
|
2014 |
| (in thousands) |
|
|
|
|
| Noncurrent liabilities |
|
$ |
(9,735 |
) |
|
$ |
(29,558 |
) |
|
| Schedule of amounts recognized in accumulated other comprehensive income |
| December 31, |
|
2015 |
|
2014 |
| (in thousands) |
|
|
|
|
| Net actuarial loss |
|
$ |
83,667 |
|
|
$ |
98,462 |
|
|
| Schedule of weighted-average assumptions used |
| December 31, |
|
2015 |
|
2014 |
|
2013 |
| ACCUMULATED BENEFIT OBLIGATION |
|
|
|
|
|
|
|
|
|
|
|
|
| Discount rate |
|
|
4.70 |
% |
|
|
4.15 |
% |
|
|
5.20 |
% |
| Rate of compensation increase |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET BENEFIT COST |
|
|
|
|
|
|
|
|
|
|
|
|
| Discount rate |
|
|
4.15 |
% |
|
|
5.20 |
% |
|
|
4.17 |
% |
| Expected return on plan assets |
|
|
7.00 |
% |
|
|
7.00 |
% |
|
|
7.00 |
% |
| Rate of compensation increase |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
| Schedule of net periodic benefit cost and other amounts recognized in other comprehensive income |
| Years ended December 31, |
|
2015 |
|
2014 |
|
2013 |
| (in thousands) |
|
|
|
|
|
|
| Service cost |
|
$ |
86 |
|
|
$ |
74 |
|
|
$ |
112 |
|
| Interest cost |
|
|
8,915 |
|
|
|
9,427 |
|
|
|
8,551 |
|
| Expected return on plan assets |
|
|
(12,788 |
) |
|
|
(12,431 |
) |
|
|
(11,589 |
) |
| Amortization of net loss |
|
|
3,761 |
|
|
|
2,439 |
|
|
|
3,910 |
|
| Net periodic loss/(benefit) |
|
$ |
(26 |
) |
|
$ |
(491 |
) |
|
$ |
984 |
|
The benefit obligations recognized in other
comprehensive income for the years ended December 31, 2015, 2014, and 2013 are summarized as follows:
| (in thousands) |
|
2015 |
|
2014 |
|
2013 |
| Pretax (income)/loss |
|
$ |
(11,035 |
) |
|
$ |
44,159 |
|
|
$ |
(41,767 |
) |
| Amortization of net loss |
|
|
(3,761 |
) |
|
|
(2,439 |
) |
|
|
(3,910 |
) |
| Total recognized in other comprehensive income |
|
|
(14,796 |
) |
|
|
41,720 |
|
|
|
(45,677 |
) |
| Total recognized in net periodic benefit (income)/cost and other comprehensive income |
|
$ |
(14,822 |
) |
|
$ |
41,229 |
|
|
$ |
(44,693 |
) |
|
| Schedule of weighted average asset allocation along with target allocation |
| |
Target |
Percentage of plan assets as of |
| |
allocations for |
December 31, |
| Asset category |
2016 |
2015 |
2014 |
| Cash and cash equivalents |
0% -5% |
1.9% |
0.5% |
| Equity securities - Rollins stock |
0% -40% |
21.2% |
19.4% |
| Domestic equity - all other |
0% - 40% |
20.5% |
20.3% |
| International equity |
0% - 30% |
22.2% |
23.2% |
| Debt securities - core fixed income |
15% - 50% |
24.0% |
23.8% |
| Real estate |
0% - 20% |
6.6% |
8.9% |
| Real return |
0.0% |
0.0% |
1.6% |
| Alternative/Opportunistic/Special |
0% -20% |
3.6% |
2.3% |
| Total |
100.0% |
100.0% |
100.0% |
|
| Schedule of plan assets using the fair value hierarchy |
The following table presents our plan assets
using the fair value hierarchy as of December 31, 2015. The fair value hierarchy has three levels based on the reliability
of the inputs used to determine fair value. See note 7 for a brief description of the three levels under the fair value hierarchy.
| (in thousands) |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| |
(1) |
|
|
Cash and Cash Equivalents |
|
$ |
3,543 |
|
|
$ |
3,543 |
|
|
$ |
|
|
|
$ |
|
|
| |
(2) |
|
|
Fixed Income Securities |
|
|
45,712 |
|
|
|
|
|
|
|
45,712 |
|
|
|
|
|
| |
|
|
|
Domestic Equity Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Rollins, Inc. Stock |
|
|
40,510 |
|
|
|
40,510 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
Other Securities |
|
|
39,070 |
|
|
|
12,008 |
|
|
|
27,062 |
|
|
|
|
|
| |
(3) |
|
|
International Equity Securities |
|
|
42,373 |
|
|
|
|
|
|
|
42,373 |
|
|
|
|
|
| |
(4) |
|
|
Real Estate |
|
|
12,565 |
|
|
|
|
|
|
|
|
|
|
|
12,565 |
|
| |
(6) |
|
|
Alternative/Opportunistic/Special |
|
|
6,867 |
|
|
|
|
|
|
|
|
|
|
|
6,867 |
|
| |
|
|
|
Total |
|
$ |
190,640 |
|
|
$ |
56,061 |
|
|
$ |
115,147 |
|
|
$ |
19,432 |
|
The following table presents our plan assets
using the fair value hierarchy as of December 31, 2014. The fair value hierarchy has three levels based on the reliability
of the inputs used to determine fair value.
| (in thousands) |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| |
(1) |
|
|
Cash and Cash Equivalents |
|
$ |
1,016 |
|
|
$ |
1,016 |
|
|
$ |
|
|
|
$ |
|
|
| |
(2) |
|
|
Fixed Income Securities |
|
|
45,768 |
|
|
|
18,322 |
|
|
|
27,446 |
|
|
|
|
|
| |
|
|
|
Domestic Equity Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Rollins, Inc. Stock |
|
|
37,271 |
|
|
|
37,271 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
Other Securities |
|
|
38,982 |
|
|
|
12,066 |
|
|
|
26,916 |
|
|
|
|
|
| |
(3) |
|
|
International Equity Securities |
|
|
44,559 |
|
|
|
|
|
|
|
44,559 |
|
|
|
|
|
| |
(4) |
|
|
Real Estate |
|
|
17,067 |
|
|
|
|
|
|
|
|
|
|
|
17,067 |
|
| |
(5) |
|
|
Real Return |
|
|
3,119 |
|
|
|
|
|
|
|
3,119 |
|
|
|
|
|
| |
(6) |
|
|
Alternative/Opportunistic/Special |
|
|
4,381 |
|
|
|
|
|
|
|
|
|
|
|
4,381 |
|
| |
|
|
|
Total |
|
$ |
192,163 |
|
|
$ |
68,675 |
|
|
$ |
102,040 |
|
|
$ |
21,448 |
|
| |
(1) |
Cash and cash equivalents, which are used to pay benefits and plan administrative expenses, are held in Rule 2a-7 money market funds. |
| |
(2) |
Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. |
| |
(3) |
Some International equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. |
| |
(4) |
Real estate fund values are primarily reported by the fund manager and are based on valuation of the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data. |
| |
(5) |
Real Return funds invest in global equities, commodities and inflation protected core bonds that are valued primarily using a market approach based on the quoted market prices of identical instruments in their respective markets. |
| |
(6) |
Alternative/Opportunistic/Special funds can invest across the capital structure in both liquid and illiquid securities that are valued using a market approach based on the quoted market prices of identical instruments, or if no market price is available, instruments will be held at their fair market value (which may be cost) as reasonably determined by the investment manager, independent dealers, or pricing services. |
|
| Schedule of reconciliation of level 3 assets |
The following table presents a reconciliation
of Level 3 assets held during the year ended December 31, 2015.
| |
|
|
|
|
|
Net |
|
Net |
|
|
| |
|
Balance at |
|
Net Realized |
|
Purchases, |
|
Transfers |
|
Balance at |
| |
|
December 31, |
|
and Unrealized |
|
Issuances and |
|
In to/(Out of) |
|
December 31, |
| (in thousands) |
|
2014 |
|
Gains/(Losses) |
|
Settlements |
|
Level 3 |
|
2015 |
| Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| UBS Trumbull Property Income |
|
$ |
12,991 |
|
|
$ |
799 |
|
|
$ |
(5,000 |
) |
|
$ |
|
|
|
$ |
8,790 |
|
| Garrison Real Estate Fund |
|
|
4,076 |
|
|
|
859 |
|
|
|
(1,160 |
) |
|
|
|
|
|
|
3,775 |
|
| Alternative/Opportunistic/Special |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Marathon European Credit Opp Fund |
|
|
4,381 |
|
|
|
347 |
|
|
|
2,139 |
|
|
|
|
|
|
|
6,867 |
|
| Total |
|
$ |
21,448 |
|
|
$ |
2,005 |
|
|
$ |
(4,021 |
) |
|
$ |
|
|
|
$ |
19,432 |
|
The following table presents a reconciliation
of Level 3 assets held during the year ended December 31, 2014.
| |
|
|
|
|
|
Net |
|
Net |
|
|
| |
|
Balance at |
|
Net Realized |
|
Purchases, |
|
Transfers |
|
Balance at |
| |
|
December 31, |
|
and Unrealized |
|
Issuances and |
|
In to/(Out of) |
|
December 31, |
| (in thousands) |
|
2013 |
|
Gains/(Losses) |
|
Settlements |
|
Level 3 |
|
2014 |
| Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| UBS Trumbull Property Income |
|
$ |
12,831 |
|
|
$ |
1,360 |
|
|
$ |
(1,200 |
) |
|
$ |
|
|
|
$ |
12,991 |
|
| Garrison Real Estate Fund |
|
|
|
|
|
|
|
|
|
|
4,076 |
|
|
|
|
|
|
|
4,076 |
|
| Alternative/Opportunistic/Special |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Marathon European Credit Opp Fund |
|
|
|
|
|
|
101 |
|
|
|
4,280 |
|
|
|
|
|
|
|
4,381 |
|
| Total |
|
$ |
12,831 |
|
|
$ |
1,461 |
|
|
$ |
7,156 |
|
|
$ |
|
|
|
$ |
21,448 |
|
|
| Schedule of estimated future benefit payments |
| (in thousands) |
|
|
| |
2016 |
|
|
$ |
10,588 |
|
| |
2017 |
|
|
|
10,973 |
|
| |
2018 |
|
|
|
11,467 |
|
| |
2019 |
|
|
|
11,785 |
|
| |
2020 |
|
|
|
12,143 |
|
| |
Thereafter |
|
|
|
64,521 |
|
| |
Total |
|
|
$ |
121,477 |
|
|
| Schedule of estimated life insurance premium payments |
| (in thousands) |
|
|
| |
2016 |
|
|
$ |
504 |
|
| |
2017 |
|
|
|
1,097 |
|
| |
2018 |
|
|
|
1,057 |
|
| |
2019 |
|
|
|
952 |
|
| |
2020 |
|
|
|
1,055 |
|
| |
Total |
|
|
$ |
4,665 |
|
|