Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Pension and Other Postretirement Benefits Disclosure

Employee Benefit Plans

Pension Plans

We sponsored a qualified defined-benefit pension plan and a post-retirement benefit plan (collectively, "the Pension Plans") consisting of a Core-Mark pension plan, which was frozen on September 30, 1986 and three plans we inherited from Fleming, our former parent company. The Fleming plans were frozen on, or prior to, August 20, 1998. There have been no new entrants to the Pension Plans after those benefit plans were frozen.

Our defined-benefit pension plan is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Under ERISA, the Pension Benefit Guaranty Corporation (“PBGC”) has the authority to terminate an underfunded pension plan under limited circumstances. In the event our pension plan is terminated for any reason while it is underfunded, we will incur a liability to the PBGC that may be equal to the entire amount of the underfunding. Our post-retirement benefit plan is not subject to ERISA. As a result, the post-retirement benefit plan is not required to be pre-funded, and, accordingly, has no plan assets.

Pension costs and other post-retirement benefit costs charged to operations are estimated on the basis of annual valuations with the assistance of an independent actuary. Adjustments arising from plan amendments, changes in assumptions and experience gains and losses, are amortized over the average future life expectancy of inactive participants for the defined-benefit plan, and expected average remaining service life of active participants for the post-retirement benefit plan.

The following tables provide a reconciliation of the changes in the Pension Plans' benefit obligation and fair value of assets over the two-year period ending December 31, 2011 and a statement of the funded status for the year ended December 31, 2011 and 2010 (dollars in millions):

	Pension Benefits						Other Post-retirement Benefits
	December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2010
Change in Benefit Obligation:
Obligation at beginning of period	$	35.4		$	35.2		$	4.1		$	4.4
Interest cost	1.8			1.9			0.2			0.2
Actuarial loss (gain)	2.9			0.3			0.5			(0.2		)
Benefit payments	(2.1		)	(2.3		)	(0.2		)	(0.3		)
Change in plan provision	—			0.3			—			—
Benefit obligation at end of period	$	38.0		$	35.4		$	4.6		$	4.1
Change in Pension Plan Assets:
Fair value of pension plan assets at beginning of period	$	26.9		$	23.6		$	—		$	—
Actual return on plan assets	0.7			2.2			—			—
Employer contributions	3.2			3.4			0.2			0.3
Benefit payments	(2.1		)	(2.3		)	(0.2		)	(0.3		)
Fair value of pension plan assets at end of period	$	28.7		$	26.9		$	—		$	—
Funded Status:
Funded status	$	(9.3	)	$	(8.5	)	$	(4.6	)	$	(4.1	)

During 2011, the underfunded status of the defined-benefit pension plan increased $0.8 million to $9.3 million, due primarily to an actuarial loss of $2.9 million and $1.2 million lower than expected returns on our pension plan assets, partially offset by $3.2 million of contributions made by the Company in 2011. In 2010, the expected return on pension plan assets was a gain of $1.7 million compared to a realized gain of $2.2 million.

The following table provides information for Pension Plans with an accumulated benefit obligation in excess of plan assets (dollars in millions):

	December 31, 2011		December 31, 2010
Projected benefit obligation	$	38.0	$	35.4
Accumulated benefit obligation	38.0		35.4
Fair value of pension plan assets	28.7		26.9

The following table provides components of the net periodic pension cost (dollars in millions):

	2011			2010			2009
Interest cost	$	1.8		$	1.9		$	2.0
Expected return on plan assets	(1.9		)	(1.7		)	(1.5		)
Amortization of net actuarial loss	0.3			0.2			0.3
Net periodic benefit cost	$	0.2		$	0.4		$	0.8

The following table provides components of the net periodic other benefit cost (dollars in millions):

	2011			2010			2009
Interest cost	$	0.2		$	0.2		$	0.5
Amortization of net actuarial loss	—			—			0.3
Amortization of prior service cost (credit)	(0.1		)	(0.1		)	—
Curtailment gain, net	—			—			(0.8		)
Net periodic other benefit cost	$	0.1		$	0.1		$	—

The prior-service costs, which include interest, are amortized on a straight-line basis over the average future life expectancy of inactive participants. Gains and losses in excess of 10% of the greater of the benefit obligation and market-related value of assets are amortized over the average future life expectancy of inactive participants. Our measurement date was on December 31, 2011. We estimated that average future life expectancy is 23.0 years for the pension benefit plan and remaining service life of active participants is 6.4 years for the post-retirement benefit plan.

Assumptions Used:

The following table shows the weighted-average assumptions used in the measurement of:

	Pension Benefits						Other Post-retirement Benefits
	December 31,						December 31,
	2011		2010		2009		2011		2010		2009
Benefit Obligations:
Discount rate	4.72	%	5.04	%	5.58	%	4.74	%	5.08	%	5.88	%
Net Periodic Benefit Costs:
Discount rate	5.04	%	5.73	%	6.26	%	5.08	%	5.88	%	6.07	%
Expected return on assets	7.35	%	7.35	%	7.35	%	n/a		n/a		n/a

The weighted-average discount rates used to determine the Pension Plan's obligations and expenses are based on a yield curve methodology which matches the expected benefits at each duration to the available high quality yields at that duration and calculating an equivalent yield. At December 31, 2011, our discount rates were 4.72% and 4.74% related to our pension and post-retirement plan benefit obligations, respectively, compared with 5.04% and 5.08%, respectively, at December 31, 2010. The decrease in the discount rate for 2011 was due primarily to lower bond yields. At December 31, 2009, our discount rates were 5.58% and 5.88% related to our pension and post-retirement plan benefit obligations, respectively. The decrease in the discount rate for 2010 compared to 2009 was due primarily to lower bond yields.

We use a building block approach in determining the overall expected long-term return on assets. Under this approach, a weighted-average expected rate of return is developed based on historical returns for each major asset class and the proportion of assets of the class held by the Pension Plans. We then review the results and may make adjustments in subsequent years to reflect expectations of future rates of return that may differ from those experienced in the past.

Assumed health care cost trend rates have an effect on the amounts reported for the post-retirement health care plans. The health care cost trend rates assumed for the post-retirement benefit plans are as follows:

	December 31, 2011	December 31, 2010
Assumed current trend rate for next year for participants under 65	7.50%	6.50%
Assumed current trend rate for next year for participants 65 and over	6.50%	6.50%
Ultimate year trend rate	5.00%	5.00%
Year that ultimate trend rate is reached for participants under 65	2016	2014
Year that ultimate trend rate is reached for participants 65 and over	2015	2014

A 1% change in assumed health care cost trend rates would have the following effects (dollars in millions):

	1% Increase		1% Decrease
Effect on total of service and interest cost components of net periodic post-retirement
health care benefit cost	$	—	$	—
Effect on the health care component of the accumulated post-retirement benefit
obligation	$	0.4	$	(0.4	)

Plan Assets:

The Company's overall investment strategy is to produce a total investment return which will satisfy future annual cash benefit payments to participants, while minimizing future contributions from the Company. Additionally, our asset allocation strategy is intended to diversify plan assets to minimize non-systematic risk and provide reasonable assurance that no single security or class of security will have a disproportionate impact on the Pension Plans.

Our investment guidelines allocation ranges are: 0-20% cash, 50-70% equity and 30-50% fixed income. Our investment guidelines also set forth the requirement for diversification within asset class, types and classes for investments prohibited and permitted, specific indices to be used for benchmark in investment decisions and criteria for individual securities.

The fair value measurements of the Pension Plans' assets by asset category at December 31, 2011 are as follows (dollars in millions):

Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	1.5	$	1.5	$	—	$	—
Equity securities:
Mutual funds	6.4		6.4		—		—
Other equity securities, primarily U.S. companies	8.7		8.7		—		—
Government securities	3.4		3.4		—		—
Corporate and muni bonds:
Other bonds	4.8		4.8		—		—
Mutual funds	0.3		0.3		—		—
Group annuity contract	3.6		—		3.6		—
Total	$	28.7	$	25.1	$	3.6	$	—

The fair value measurements of the Pension Plans' assets by asset category at December 31, 2010 are as follows (dollars in millions):

Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	3.1	$	3.1	$	—	$	—
Equity securities:
Mutual funds	6.5		6.5		—		—
Other equity securities, primarily U.S. companies	8.5		8.5		—		—
Government securities	2.4		2.4		—		—
Corporate and muni bonds:
Other bonds	2.5		2.5		—		—
Mutual funds	0.5		0.5		—		—
Group annuity contract	3.4		—		3.4		—
Total	$	26.9	$	23.5	$	3.4	$	—

Debt and equity securities are recorded at their fair market value each year-end as determined by quoted closing market prices on national securities exchanges or other markets, as applicable. The group annuity consists primarily of investment grade fixed income securities. The participating annuity contract is valued based on discounted cash flows of current yields of similar securities with comparable duration based on the underlying fixed income investments.

We expect to contribute at least $2.2 million and $0.3 million to our pension plan and post-retirements benefits plan, respectively, in 2012.

Estimated future benefit payments reflecting future service are as follows (dollars in millions):

Year ended December 31,	Pension		Other Post-retirement
2012	$	2.9	$	0.3
2013	2.7		0.3
2014	3.0		0.4
2015	2.7		0.3
2016	2.8		0.3
2017 through 2021	14.4		1.8

Amounts recognized in the statements of stockholders' equity and comprehensive income (dollars in millions):

	Pension After Tax			Other Post-retirement Benefits After Tax
Net gain during 2009	$	1.1		$	1.3
Net gain during 2010	0.2			—
Net loss during 2011	(2.3		)	(0.4		)

Amounts recognized in the balance sheets (dollars in millions):

	Pension						Other Post-retirement
	December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2010
Current liabilities	$	—		$	—		$	(0.3	)	$	(0.3	)
Non-current liabilities	(9.3		)	(8.5		)	(4.3		)	(3.8		)
Total	$	(9.3	)	$	(8.5	)	$	(4.6	)	$	(4.1	)

Expected amortizations for the year ending December 31, 2012 (dollars in millions):

	Pension		Other Post-retirement
Expected amortization of net loss	$	0.4	$	—
Expected amortization of prior service cost (credit)	—		(0.1		)
Total expected amortizations for the year ending December 31, 2012	$	0.4	$	(0.1	)

Multi-employer Defined Benefit Plan

The Company contributed $0.3 million in 2011 to multi-employer defined benefit plans under the terms of a collective-bargaining agreement that covers its union represented employees.

Savings Plans

We maintain defined-contribution plans in the U.S., subject to Section 401(k) of the Internal Revenue Code, and in Canada, subject to the Income Tax Act. For the year ended December 31, 2011, eligible U.S. employees could elect to contribute, on a tax-deferred basis, from 1% to 75% of their compensation to a maximum of $17,000. Eligible U.S. employees over 50 years of age could also contribute an additional $5,500 on a tax-deferred basis. In Canada, employees could elect to contribute up to a maximum of $22,450 Canadian dollars. Under the 401(k) plan, we match 100% of U.S. employee contributions up to 2% of base salary and match 25% of employee contributions from 2% to 6% of base salary. For Canadian employees,we match 50% of employee contributions up to 3% of base salary. For the year ended December 31, 2011, 2010 and 2009, we made matching payments of approximately $2.5 million, $2.3 million and $2.2 million, respectively.