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RETIREMENT BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2012
Components of Net Pension Expense

The components of net pension expense for our defined benefit retirement plans are as follows (in millions):

 

     U.S. and Puerto Rico     Non-U.S.  
For the Years Ended December 31,    2012     2011     2010     2012     2011     2010  

Service cost

    $ 11.4      $ 11.4      $ 10.9      $ 15.0      $ 16.8      $ 14.6   

Interest cost

      13.3        13.0        11.5        6.1        7.3        6.7   

Expected return on plan assets

      (25.5 )      (21.9 )      (18.1 )      (7.6 )      (9.6 )      (8.0 ) 

Settlement

      0.7        —          —          —          —          —     

Amortization of prior service cost

      (2.0 )      —          (0.1 )      (0.9 )      (0.8 )      (0.7 ) 

Amortization of unrecognized actuarial loss

      11.4        6.2        2.4        1.9        1.2        1.2   

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic benefit cost

    $ 9.3      $ 8.7      $ 6.6      $ 14.5      $ 14.9      $ 13.8   

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Weighted Average Actuarial Assumptions Used to Determine Net Pension Expense for Our Defined Benefit Retirement Plans

The weighted average actuarial assumptions used to determine net pension expense for our defined benefit retirement plans were as follows:

 

     U.S. and Puerto Rico     Non-U.S.  
For the Years Ended December 31,    2012     2011     2010     2012     2011     2010  

Discount rate

      4.97 %      5.82 %      6.26 %      2.58 %      2.82 %      3.19 % 

Rate of compensation increase

      3.81 %      3.81 %      3.80 %      2.77 %      2.64 %      2.63 % 

Expected long-term rate of return on plan assets

      7.75 %      7.75 %      7.50 %      3.51 %      4.01 %      4.12 % 
Changes in Projected Benefit Obligations and Plan Assets

Changes in projected benefit obligations and plan assets were (in millions):

 

     U.S. and Puerto Rico        Non-U.S.  
For the Years Ended December 31,    2012        2011        2012        2011  

Projected benefit obligation – beginning of year

    $ 290.0         $ 227.1         $ 235.1         $ 226.5   

Service cost

      11.4           11.4           15.0           16.8   

Interest cost

      13.3           13.0           6.1           7.3   

Plan amendments

      (17.1 )         –           –           –   

Employee contributions

      –           –           17.5           15.9   

Benefits paid

      (7.0 )         (4.5 )         (21.3 )         (36.7 ) 

Settlement

      (1.1 )         –           –           –   

Actuarial (gain) loss

      24.8           43.0           6.9           0.4   

Prior service cost

      –           –           (3.7 )         (1.6 ) 

Expenses paid

      –           –           (0.2 )         (0.1 ) 

Translation loss

      –           –           4.0           6.6   

 

       

 

 

       

 

 

       

 

 

  

Projected benefit obligation – end of year

    $ 314.3         $ 290.0         $ 259.4         $ 235.1   

 

       

 

 

       

 

 

       

 

 

  
Changes in Fair Value of Plan Assets
For the Years Ended December 31,
      U.S. and Puerto Rico     Non-U.S.  
     2012     2011     2012     2011  

Plan assets at fair market value - beginning of year

    $ 275.1      $ 244.9      $ 205.1      $ 206.0   

Actual return on plan assets

      40.7        (2.1 )      11.4        (2.5 ) 

Employer contributions

      54.2        36.8        15.5        16.0   

Employee contributions

      —           —           17.5        15.9   

Benefits paid

      (7.0 )      (4.5 )      (21.3 )      (36.7 ) 

Expenses paid

      —           —           (0.2 )      (0.1 ) 

Translation gain

      —           —           3.6        6.5   
  

 

 

    

 

 

    

 

 

    

 

 

  

Plan assets at fair market value - end of year

    $ 363.0      $ 275.1      $ 231.6      $ 205.1   
  

 

 

    

 

 

    

 

 

    

 

 

  

Funded status

    $ 48.7      $ (14.9 )    $ (27.8 )    $ (30.0 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
Summary of Amounts Recognized in Balance Sheet

Amounts recognized in consolidated balance sheet:

                  

Prepaid pension

    $ 61.9         $ –         $ 7.5         $ 4.3   

Short-term accrued benefit liability

      (0.4 )         (1.0 )         –           –   

Long-term accrued benefit liability

      (12.8 )         (13.9 )         (35.3 )         (34.3 ) 

 

       

 

 

       

 

 

       

 

 

  

Net amount recognized

    $ 48.7         $ (14.9 )       $ (27.8 )       $ (30.0 )
Summary of Amounts Recognized in Other Comprehensive Income Loss

Amounts recognized in accumulated other comprehensive income:

                  

Unrecognized prior service cost

    $ (14.5 )       $ 0.6         $ (9.6 )       $ (6.7 ) 

Unrecognized actuarial loss

      136.9           140.4           35.9           45.5   

 

       

 

 

       

 

 

       

 

 

  

Total amount recognized

    $ 122.4         $ 141.0         $ 26.3         $ 38.8   

 

       

 

 

       

 

 

       

 

 

  
Part of Accumulated Other Comprehensive Income

We estimate the following amounts recorded as part of accumulated other comprehensive income will be recognized as part of our net pension expense during 2013 (in millions):

      U.S. and
Puerto Rico		      Non-U.S.  

Unrecognized prior service cost

    $ (2.6 )     $ (1.3 ) 

Unrecognized actuarial loss

      15.4         1.9   

 

     

 

 

  
   $ 12.8       $ 0.6   

 

     

 

 

  
Weighted Average Actuarial Assumptions Used to Determine Projected Benefit Obligation for Defined Benefit Retirement Plans

The weighted average actuarial assumptions used to determine the projected benefit obligation for our defined benefit retirement plans were as follows:

 

     U.S. and Puerto Rico      Non-U.S .  
For the Years Ended December 31,    2012      2011      2010      2012      2011      2010  

Discount rate

      4.32 %       5.05 %       5.82 %       2.15 %       2.49 %       2.82 % 

Rate of compensation increase

      3.29 %       3.81 %       3.80 %       2.75 %       2.76 %       2.61 % 
Plans with Benefit Obligations in Excess of Plan Assets

Plans with projected benefit obligations in excess of plan assets were as follows (in millions):

 

     U.S. and Puerto Rico        Non-U.S.  
As of December 31,    2012        2011        2012        2011  

Projected benefit obligation

    $ 29.3         $ 290.0         $ 233.1         $ 211.5   

Plan assets at fair market value

      16.0           275.1           197.7           177.3   
Plans with Accumulated Benefit Obligations in Excess of Plan Assets

Plans with accumulated benefit obligations in excess of plan assets were as follows (in millions):

 

     U.S. and Puerto Rico        Non-U.S.  
As of December 31,    2012        2011        2012        2011  

Accumulated benefit obligation

    $ 26.9         $ 22.4         $ 191.9         $ 190.4   

Plan assets at fair market value

      16.0           13.0           168.8           168.7   
Summary of Benefits Expected to be Paid Out

The benefits expected to be paid out in each of the next five years and for the five years combined thereafter are as follows (in millions):

 

For the Years Ending December 31,    U.S. and
Puerto Rico		        Non-U.S.  

2013

    $ 8.9         $ 16.2   

2014

      10.4           14.2   

2015

      11.4           16.3   

2016

      13.1           16.1   

2017

      14.6           16.4   

2018-2022

      96.5           109.7   
Fair Value of U.S. and Puerto Rico Pension Plan Assets

The fair value of our U.S. and Puerto Rico pension plan assets by asset category was as follows (in millions):

 

     As of December 31, 2012  
            Fair Value Measurements at Reporting Date Using:  
Asset Category    Total     

Quoted Prices
in Active
Markets for
Identical

Assets
(Level 1)

      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Cash and cash equivalents

    $ 3.2       $ 3.2       $ –       $ –   

Equity securities:

            

U.S. large-cap

      60.3         –         60.3         –   

U.S. small-cap

      22.1         –         22.1         –   

International

      87.5         –         87.5         –   

Real estate

      29.5         –         29.5         –   

Commodity-linked mutual funds

      38.3         –         38.3         –   

Intermediate fixed income securities

      122.1         –         122.1         –   

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 363.0       $ 3.2       $ 359.8       $ –   

 

     

 

 

     

 

 

     

 

 

  

 

     As of December 31, 2011  
            Fair Value Measurements at Reporting Date Using:  
Asset Category    Total     

Quoted Prices
in Active
Markets for
Identical

Assets

(Level 1)

      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Cash and cash equivalents

    $ 1.4       $ 1.4       $ –       $ –   

Equity securities:

            

U.S. large-cap

      52.9         –         52.9         –   

U.S. small-cap

      17.4         –         17.4         –   

International

      50.0         –         50.0         –   

Real estate

      18.7         –         18.7         –   

Commodity-linked mutual funds

      25.0         –         25.0         –   

Intermediate fixed income securities

      109.7         –         109.7         –   

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 275.1       $ 1.4       $ 273.7       $ –   

 

     

 

 

     

 

 

     

 

 

  
Fair Value of Non-U.S. Pension Plan Assets

The fair value of our non-U.S. pension plan assets was as follows (in millions):

 

    As of December 31, 2012  
          Fair Value Measurements at Reporting Date Using:  
Asset Category   Total    

Quoted Prices

in Active
Markets for
Identical

Assets

(Level 1)

     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Cash and cash equivalents

   $ 12.7      $ 12.7      $ –      $ –   

Equity securities:

        

Energy

     1.7        1.7        –        –   

Materials

     2.6        2.6        –        –   

Industrials

     4.1        4.1        –        –   

Consumer discretionary

     2.2        2.2        –        –   

Consumer staples

     3.0        3.0        –        –   

Healthcare

     4.9        4.9        –        –   

Financials

     7.3        7.3        –        –   

Information technology

     2.5        2.5        –        –   

Telecommunication services

     1.0        1.0        –        –   

Utilities

     1.6        1.6        –        –   

Other

     35.1        32.5        2.6        –   

Fixed income securities:

        

Government bonds

     44.9        –        44.9        –   

Corporate bonds

     37.9        –        37.9        –   

Asset-backed securities

     13.2        –        13.2        –   

Other debt

     1.0        –        1.0        –   

Other types of investments:

        

Mortgage loans

     5.4        –        5.4        –   

Insurance contracts

     5.9        –        5.9        –   

Other investments

     7.5        –        7.5        –   

Real estate

     37.1        –        –        37.1   

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 231.6      $ 76.1      $ 118.4      $ 37.1   

 

    

 

 

    

 

 

    

 

 

  

 

    As of December 31, 2011  
          Fair Value Measurements at Reporting Date Using:  
Asset Category   Total    

Quoted Prices
in Active
Markets for
Identical

Assets

(Level 1)

     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Cash and cash equivalents

   $ 10.8      $ 10.8      $ –      $ –   

Equity securities:

        

Energy

     1.9        1.9        –        –   

Materials

     2.0        2.0        –        –   

Industrials

     3.7        3.7        –        –   

Consumer discretionary

     2.1        2.1        –        –   

Consumer staples

     4.0        4.0        –        –   

Healthcare

     6.0        6.0        –        –   

Financials

     5.8        5.8        –        –   

Information technology

     2.3        2.3        –        –   

Telecommunication services

     1.0        1.0        –        –   

Utilities

     1.6        1.6        –        –   

Other

     28.9        26.6        2.3        –   

Fixed income securities:

        

Government bonds

     42.5        –        42.5        –   

Corporate bonds

     35.5        –        35.5        –   

Asset-backed securities

     8.4        –        8.4        –   

Other debt

     1.1        –        1.1        –   

Other types of investments:

        

Mortgage loans

     5.2        –        5.2        –   

Insurance contracts

     5.5        –        5.5        –   

Other investments

     5.0        –        5.0        –   

Real estate

     31.8        –        –        31.8   

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 205.1      $ 67.8      $ 105.5      $ 31.8   

 

    

 

 

    

 

 

    

 

 

  
Reconciliation of Beginning and Ending Balances

The following table provides a reconciliation of the beginning and ending balances of our non-U.S. pension plan assets measured at fair value that used significant unobservable inputs (Level 3) (in millions):

 

      December 31,
2012		  

Beginning Balance

      31.8   

Gains on assets sold

      0.2   

Change in fair value of assets

      0.9   

Net purchases and sales

      3.3   

Translation gain

      0.9   

 

  

Ending Balance

    $ 37.1