Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2012

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

7.     Pension and Other Postretirement Benefits

        We maintain four funded defined benefit pension plans: two U.S. plans and two Canadian plans. Three of the four plans are closed to new employees. One of our Canadian plans remains open to new employees. We also provide group medical insurance benefits to certain retirees. The specific medical benefits provided to retirees vary by group and location.

        Net periodic benefit cost included the following components:

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
	(in millions)
Pension Plans
Service cost for benefits earned during the period	$	3.1		$	2.8		$	9.3		$	8.5
Interest cost on projected benefit obligation		8.6			9.0			25.8			26.9
Expected return on plan assets		(8.6	)		(8.8	)		(25.9	)		(26.4	)
Amortization of actuarial loss		2.5			1.5			7.4			4.5
Net periodic benefit cost	$	5.6		$	4.5		$	16.6		$	13.5
Retiree Medical
Service cost for benefits earned during the period	$	0.7		$	0.7		$	2.2		$	2.0
Interest cost on projected benefit obligation		0.9			1.1			2.7			3.2
Curtailment gain		(10.9	)		—			(10.9	)		—
Amortization of transition obligation		0.1			0.1			0.3			0.3
Amortization of actuarial loss		0.1			0.2			0.5			0.7
Net periodic benefit cost (income)	$	(9.1	)	$	2.1		$	(5.2	)	$	6.2

        In the third quarter of 2012, we implemented a reduction in certain retiree medical benefits. This curtailment of benefits was recognized in the third quarter and resulted in a $24.3 million reduction in the retiree medical liability. Of the $24.3 million reduction, $13.4 million was recognized in other comprehensive income and $10.9 million was recognized in net periodic benefit plan cost as shown in the table above. Of the $10.9 million, $9.6 million was reported in cost of sales and $1.3 million was reported in selling, general and administrative expenses.

        Our 2012 consolidated pension funding contributions are estimated to be approximately $20.0 million, of which approximately $9.2 million was funded in the first nine months of 2012.

        We have defined contribution plans covering substantially all employees. Under these plans, we contribute a fixed percentage of base salary to employees' accounts and match employee contributions up to specified limits. We contributed $3.4 million and $9.7 million to the plans for the three and nine months ended September 30, 2012, respectively, and $2.9 million and $8.7 million to the plans for the three and nine months ended September 30, 2011, respectively.