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Retirement Benefits | 12 Months Ended
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Dec. 31, 2012
Retirement Benefits |
14. | Retirement Benefits
The Company sponsors several qualified and nonqualified pension plans and other postretirement plans for its employees. The Company uses a measurement date of December 31 for its defined benefit pension plans and post retirement medical plans. The Company employs the measurement date provisions of ASC 715, “Compensation-Retirement Benefits”, which require the measurement date of plan assets and liabilities to coincide with the sponsor’s year end. The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets over the two-year period ended December 31, 2012, and a statement of the funded status at December 31 for both years.
|  | Pension Benefits |  |  | Other Benefits |
|  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  |  |  |  |  |
|  | (In thousands) |
CHANGE IN BENEFIT OBLIGATION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligation at January 1 |  | $ | 101,511 |  |  | $ | 47,763 |  |  | $ | 90,102 |  |  | $ | 42,245 |  |  | $ | 21,073 |  |  | $ | 20,068 |
Service cost |  |  | 1,756 |  |  |  | 1,300 |  |  |  | 1,759 |  |  |  | 1,078 |  |  |  | 763 |  |  |  | 691 |
Interest cost |  |  | 4,247 |  |  |  | 2,206 |  |  |  | 4,506 |  |  |  | 2,320 |  |  |  | 922 |  |  |  | 1,035 |
Plan amendments |  |  | 59 |  |  |  | 410 |  |  |  | — |  |  |  | 9 |  |  |  | 159 |  |  |  | — |
Benefits paid |  |  | (4,097 | ) |  |  | (3,536 | ) |  |  | (4,224 | ) |  |  | (1,703 | ) |  |  | (704 | ) |  |  | (734 | )
Actuarial loss |  |  | 13,202 |  |  |  | 6,700 |  |  |  | 10,159 |  |  |  | 18 |  |  |  | 3,313 |  |  |  | 60 |
Currency translation |  |  | — |  |  |  | 1,712 |  |  |  | — |  |  |  | (906 | ) |  |  | 61 |  |  |  | (47 | )
Curtailments/settlements |  |  | (5,490 | ) |  |  | — |  |  |  | (791 | ) |  |  | — |  |  |  | — |  |  |  | — |
Acquisition |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,702 |  |  |  | — |  |  |  | — |
Obligation at December 31 |  | $ | 111,188 |  |  | $ | 56,555 |  |  | $ | 101,511 |  |  | $ | 47,763 |  |  | $ | 25,587 |  |  | $ | 21,073 |
CHANGE IN PLAN ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at January 1 |  | $ | 59,619 |  |  | $ | 16,914 |  |  | $ | 58,147 |  |  | $ | 17,400 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets |  |  | 6,177 |  |  |  | 1,944 |  |  |  | (459 | ) |  |  | (720 | ) |  |  | — |  |  |  | — |
Employer contributions(1) |  |  | 17,287 |  |  |  | 3,514 |  |  |  | 6,946 |  |  |  | 1,569 |  |  |  | 704 |  |  |  | 734 |
Benefits paid |  |  | (4,097 | ) |  |  | (3,536 | ) |  |  | (4,224 | ) |  |  | (1,703 | ) |  |  | (704 | ) |  |  | (734 | )
Currency translation |  |  | — |  |  |  | 810 |  |  |  | — |  |  |  | (57 | ) |  |  | — |  |  |  | — |
Settlements |  |  | (4,408 | ) |  |  | — |  |  |  | (791 | ) |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | 14 |  |  |  | — |  |  |  | 425 |  |  |  | — |  |  |  | — |
Fair value of plan assets at December 31 |  | $ | 74,578 |  |  | $ | 19,660 |  |  | $ | 59,619 |  |  | $ | 16,914 |  |  | $ | — |  |  | $ | — |
Funded status at December 31 |  | $ | (36,610 | ) |  | $ | (36,894 | ) |  | $ | (41,892 | ) |  | $ | (30,849 | ) |  | $ | (25,587 | ) |  | $ | (21,073 | )
COMPONENTS ON THE CONSOLIDATED BALANCE SHEETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  | $ | (588 | ) |  | $ | (743 | ) |  | $ | (602 | ) |  | $ | (733 | ) |  | $ | (907 | ) |  | $ | (937 | )
Noncurrent liabilities |  |  | (36,022 | ) |  |  | (36,151 | ) |  |  | (41,290 | ) |  |  | (30,116 | ) |  |  | (24,680 | ) |  |  | (20,136 | )
Net liability at December 31 |  | $ | (36,610 | ) |  | $ | (36,894 | ) |  | $ | (41,892 | ) |  | $ | (30,849 | ) |  | $ | (25,587 | ) |  | $ | (21,073 | )
(1) | Includes $10.0 million discretionary contribution to U.S. plan in 2012.
The accumulated benefit obligation (ABO) for all defined benefit pension plans was $160.7 million and $143.0 million at December 31, 2012 and 2011, respectively. The weighted average assumptions used in the measurement of the Company’s benefit obligation at December 31, 2012 and 2011 were as follows:
|  | U.S. Plans |  |  | Non-U.S. Plans |
|  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
Discount rate |  |  | 3.56 | % |  |  | 4.45 | % |  |  | 3.91 | % |  |  | 4.68 | %
Rate of compensation increase |  |  | 3.94 | % |  |  | 3.90 | % |  |  | 2.99 | % |  |  | 2.96 | %
The pretax amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2012 and 2011 were as follows:
|  | Pension Benefits |  |  | Other Benefits |
|  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S |  |  |  |  |  |  |
|  | (In thousands) |
Prior service cost (credit) |  | $ | 275 |  |  | $ | 330 |  |  | $ | 419 |  |  | $ | 127 |  |  | $ | (2,325 | ) |  | $ | (2,697 | )
Net loss |  |  | 51,240 |  |  |  | 15,496 |  |  |  | 49,509 |  |  |  | 8,781 |  |  |  | 5,279 |  |  |  | 2,198 |
Total |  | $ | 51,515 |  |  | $ | 15,826 |  |  | $ | 49,928 |  |  | $ | 8,908 |  |  | $ | 2,954 |  |  | $ | (499 | )
The amounts in Accumulated other comprehensive income (loss) as of December 31, 2012, that are expected to be recognized as components of net periodic benefit cost during 2013 are as follows:
|  | U.S. Pension Benefit Plans |  |  | Non-U.S. Pension Benefit Plans |  |  | Other Benefit Plans |  |  | Total |
|  | (In thousands) |
Prior service cost (credit) |  | $ | 104 |  |  | $ | 26 |  |  | $ | (373 | ) |  | $ | (243 | )
Net loss |  |  | 6,327 |  |  |  | 935 |  |  |  | 396 |  |  |  | 7,658 |
Total |  | $ | 6,431 |  |  | $ | 961 |  |  | $ | 23 |  |  | $ | 7,415 |
The following tables provide the components of, and the weighted average assumptions used to determine, the net periodic benefit cost for the plans in 2012, 2011 and 2010:
|  | Pension Benefits |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
|  | (In thousands) |
Service cost |  | $ | 1,756 |  |  | $ | 1,300 |  |  | $ | 1,759 |  |  | $ | 1,078 |  |  | $ | 1,665 |  |  | $ | 719 |
Interest cost |  |  | 4,247 |  |  |  | 2,206 |  |  |  | 4,506 |  |  |  | 2,320 |  |  |  | 4,525 |  |  |  | 2,148 |
Expected return on plan assets |  |  | (4,687 | ) |  |  | (1,035 | ) |  |  | (4,755 | ) |  |  | (1,117 | ) |  |  | (4,396 | ) |  |  | (945 | )
Net amortization |  |  | 5,376 |  |  |  | 589 |  |  |  | 4,855 |  |  |  | 442 |  |  |  | 4,401 |  |  |  | 302 |
Net periodic benefit cost |  | $ | 6,692 |  |  | $ | 3,060 |  |  | $ | 6,365 |  |  | $ | 2,723 |  |  | $ | 6,195 |  |  | $ | 2,224 |
|  | Other Benefits |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (In thousands) |
Service cost |  | $ | 763 |  |  | $ | 691 |  |  | $ | 528 |
Interest cost |  |  | 922 |  |  |  | 1,035 |  |  |  | 1,008 |
Net amortization |  |  | 11 |  |  |  | (156 | ) |  |  | (370 | )
Net periodic benefit cost |  | $ | 1,696 |  |  | $ | 1,570 |  |  | $ | 1,166 |
|  | U.S. Plans |  |  | Non-U.S. Plans |
|  | 2012 |  |  | 2011 |  |  | 2010 |  |  | 2012 |  |  | 2011 |  |  | 2010 |
Discount rate |  |  | 4.45 | % |  |  | 5.20 | % |  |  | 5.80 | % |  |  | 4.68 | % |  |  | 5.35 | % |  |  | 5.88 | %
Expected return on plan assets |  |  | 8.00 | % |  |  | 8.25 | % |  |  | 8.50 | % |  |  | 5.90 | % |  |  | 6.17 | % |  |  | 6.28 | %
Rate of compensation increase |  |  | 3.90 | % |  |  | 3.90 | % |  |  | 3.89 | % |  |  | 2.96 | % |  |  | 3.37 | % |  |  | 3.35 | %
The following table provides pretax amounts recognized in Accumulated other comprehensive income (loss) in 2012:
|  | Pension Benefits |
|  | U.S. |  |  | Non-U.S. |  |  | Other Benefits |
|  | (In thousands) |
Net loss in current year |  | $ | (10,630 | ) |  | $ | (5,778 | ) |  | $ | (3,314 | )
Prior service cost |  |  | (58 | ) |  |  | (206 | ) |  |  | (159 | )
Amortization of prior service cost (credit) |  |  | 105 |  |  |  | 9 |  |  |  | (214 | )
Amortization of net loss |  |  | 5,271 |  |  |  | 580 |  |  |  | 225 |
Exchange rate effect on amounts in OCI |  |  | — |  |  |  | (516 | ) |  |  | 8 |
Total |  | $ | (5,312 | ) |  | $ | (5,911 | ) |  | $ | (3,454 | )
The discount rates for our plans are derived by matching the plan’s cash flows to a yield curve that provides the equivalent yields on zero-coupon bonds for each maturity. The discount rate selected is the rate that produces the same present value of cash flows. In selecting the expected rate of return on plan assets, the Company considers the historical returns and expected returns on plan assets. The expected returns are evaluated using asset return class, variance and correlation assumptions based on the plan’s target asset allocation and current market conditions. Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation or the market value of assets are amortized over the average remaining service period of active participants. Costs of defined contribution plans were $7.9 million, $7.8 million and $7.0 million for 2012, 2011 and 2010, respectively. The Company, through its subsidiaries, participates in certain multiemployer pension plans covering approximately 400 participants under U.S. collective bargaining agreements. None of these plans are considered individually significant to the Company as contributions to these plans totaled $1.0 million, $1.0 million, and $0.9 million for 2012, 2011, and 2010, respectively. For measurement purposes, a 7.46% weighted average annual rate of increase in the per capita cost of covered health care benefits was assumed for 2012. The rate was assumed to decrease gradually each year to a rate of 4.49% for 2027, and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A 1% increase in the assumed health care cost trend rates would increase the service and interest cost components of the net periodic benefit cost by $0.2 million and the health care component of the accumulated postretirement benefit obligation by $2.0 million. A 1% decrease in the assumed health care cost trend rate would decrease the service and interest cost components of the net periodic benefit cost by $0.2 million and the health care component of the accumulated postretirement benefit obligation by $1.7 million. Plan Assets The Company’s pension plan weighted average asset allocations at December 31, 2012 and 2011, by asset category, were as follows:
|  | 2012 |  |  | 2011 |
Equity securities |  |  | 68 | % |  |  | 65 | %
Fixed income securities |  |  | 32 |  |  |  | 35 |
Total |  |  | 100 | % |  |  | 100 | %
The following tables summarize the basis used to measure defined benefit plans’ assets at fair value at December 31, 2012 and 2011:
|  | Basis of Fair Value Measurement |
|  | Outstanding Balances |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
As of December 31, 2012 |  | (In thousands) |
Equity |  | $ | 19,779 |  |  | $ | 19,779 |  |  | $ | — |  |  | $ | — |
Absolute return funds(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 45,555 |  |  |  | 45,555 |  |  |  | — |  |  |  | — |
Non U.S. |  |  | 26,685 |  |  |  | 18,898 |  |  |  | 7,787 |  |  |  | — |
Other(2) |  |  | 2,219 |  |  |  | 2,219 |  |  |  | — |  |  |  | — |
|  | $ | 94,238 |  |  | $ | 86,451 |  |  | $ | 7,787 |  |  | $ | — |
|  | Basis of Fair Value Measurement |
|  | Outstanding Balances |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
As of December 31, 2011 |  |  | (In thousands) |
Equity |  | $ | 14,968 |  |  | $ | 14,968 |  |  | $ | — |  |  | $ | — |
Absolute return funds(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 38,449 |  |  |  | 38,449 |  |  |  | — |  |  |  | — |
Non U.S. |  |  | 21,709 |  |  |  | 16,520 |  |  |  | 5,189 |  |  |  | — |
Other(2) |  |  | 1,015 |  |  |  | 1,015 |  |  |  | — |  |  |  | — |
|  | $ | 76,141 |  |  | $ | 70,952 |  |  | $ | 5,189 |  |  | $ | — |
(1) | Primarily funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed benchmark with specific return and volatility targets.
(2) | Primarily cash and cash equivalents.
Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (“NAV”) provided by the fund administrator. The NAV is based on value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors. Investment Policies and Strategies The investment objectives of the Company’s plan assets are to earn the highest possible rate of return consistent with the tolerance for risk as determined periodically by the Company in its role as a fiduciary. The general guidelines of asset allocation of fund assets are that “equities” will represent from 55% to 75% of the market value of total fund assets with a target of 66%, and “fixed income” obligations, including cash, will represent from 25% to 45% with a target of 34%. The term “equities” includes common stock, convertible bonds and convertible stock. The term “fixed income” includes preferred stock and/or contractual payments with a specific maturity date. The Company strives to maintain asset allocations within the designated ranges by conducting periodic reviews of fund allocations and plan liquidity needs, and rebalancing the portfolio accordingly. The total fund performance is monitored and results measured using a 3- to 5-year moving average against long-term absolute and relative return objectives to meet actuarially determined forecasted benefit obligations. No restrictions are placed on the selection of individual investments by the qualified investment fund managers. The performance of the investment fund managers is reviewed on a regular basis, using appointed professional independent advisors. As of December 31, 2012 and 2011, there were no shares of the Company’s stock held in plan assets. Cash Flows The Company expects to contribute approximately $7.0 million to its defined benefit plans and $0.9 million to its other postretirement benefit plans in 2013. The Company also expects to contribute approximately $8.6 million to its defined contribution plan and $7.0 million to its 401(k) savings plan in 2013. Estimated Future Benefit Payments The future estimated benefit payments for the next five years and the five years thereafter are as follows: 2013 — $12.8 million; 2014 — $10.2 million; 2015 — $9.8 million; 2016 — $9.9 million; 2017 — $10.4 million; 2018 to 2022 — $56.7 million

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 158 -Paragraph 7, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS106-2 -Paragraph 20, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Implementation Guide (Q and A) -Number FAS88 -Paragraph 63 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 106 -Paragraph 518 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5, 6, 7, 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 8 -Subparagraph m -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 87 -Paragraph 264 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 30 -Paragraph 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 03-2 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph h -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph q -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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