(9) Retirement Benefits

The Company has a qualified noncontributory pension plan covering substantially all U.S. employees. The benefits provided by this plan are measured by length of service, compensation and other factors, and are currently funded by trusts established under the plan. Funding of retirement costs for the plan complies with the minimum funding requirements specified by the Employee Retirement Income Security Act, as amended. As of December 31, 2011, the qualified noncontributory pension plan was closed to new participants. In addition, the Company has two unfunded non-qualified deferred compensation pension plans for certain U.S. employees. The Pension Restoration Plan provides supplemental retirement benefits. The benefit is based on the same benefit formula as the qualified pension plan except that it does not limit the amount of a participant's compensation or maximum benefit. The Supplemental Executive Retirement Plan credits an individual with 0.5 years of service for each year of service credited under the qualified plan. The benefits calculated under the non-qualified pension plans are offset by the participant's benefit payable under the qualified plan. The liabilities for the non-qualified deferred compensation pensions plans are included in "Other current accrued liabilities" and "Other liabilities" in the Consolidated Balance Sheet.

The Company is also required by the French government to provide a lump sum benefit payable upon retirement to its French employees. A dedicated insurance policy is in place that can reimburse the Company for these retirement payments.

The Company sponsors two defined benefit postretirement plans that cover both salaried and hourly employees. One plan provides medical benefits, and the other plan provides life insurance benefits. Both plans are contributory, with retiree contributions adjusted periodically. The Company accrues the estimated costs of the plans over the employee's service periods. The Company's postretirement health care plan is unfunded. For measurement purposes, the submitted claims medical trend was assumed to be 9.25% in 1997. Thereafter, the Company's obligation is fixed at the amount of the Company's contribution for 1997.

Effective January 1, 2013, the Company's postretirement health plan was amended to discontinue medical benefits for all future retirees under the age of 65 and all future and current employees over the age of 65. Premiums for current retirees under the age of 65 were increased and the company subsidy was eliminated. The plan amendment resulted in a $3.4 million reduction in the Accumulated Postretirement Benefit Obligation at December 31, 2012.

The Company also has qualified defined contribution retirement plans covering substantially all of its U.S. employees and certain Canadian employees. For U.S. salaried employees, the Company makes contributions of 75% of employee contributions up to a maximum employee contribution of 6% of employee earnings. For U.S. hourly employees, the Company made contributions of 75% of employee contributions from January 1, 2011 through September 30, 2011 and then 100% of employee contributions thereafter up to a maximum employee contribution of 6% of employee earnings. The plan was amended to include the change for U.S. hourly employees on October 1, 2011. Employees may contribute up to an additional 18% (in 1% increments), which is not subject to matching by the Company. For Canadian employees, the Company makes contributions of 3%-8% of an employee's salary with no individual employee matching required. All obligations of the Company are funded through December 31, 2012. In addition, the Company provides an unfunded non-qualified deferred compensation defined contribution plan for certain U.S. employees. The Company's and individual's contributions are based on the same formula as the qualified contribution plan except that it does not limit the amount of a participant's compensation or maximum benefit. The contribution calculated under the non-qualified defined contribution plan is offset by the Company's and participant's contributions under the qualified plan. The Company's expense for these plans totaled $11.3 million, $4.6 million and $3.8 million in the years ended December 31, 2012, 2011 and 2010, respectively. The liability for the non-qualified deferred defined contribution plan is included in "Other current accrued liabilities" in the Consolidated Balance Sheet.

Obligations and Funded Status

At December 31

	Pension Benefits						Other Benefits
(Thousands of dollars)	2012			2011			2012			2011

Changes in benefit obligation

Benefit obligation at beginning of year	$	283,866		$	227,259		$	7,894		$	6,961

Service cost		10,209			6,881			176			129
Interest cost		12,147			11,842			311			347
Plan participants' contributions		-			-			516			646
Actuarial loss		32,547			48,250			182			673
Benefits paid		(11,220	)		(10,333	)		(860	)		(862	)
Plan change		-			-			(3,434	)		-
Other		29			(33	)		-			-

Benefit obligation at end of year		327,578			283,866			4,785			7,894

Change in plan assets

Fair value of plan assets at beginning of year		190,547			205,054			-			-

Actual return (loss) on plan assets		19,511			(4,595	)		-			-
Employer contributions		16,131			441			343			216
Plan participants' contributions		-			-			516			646
Benefits paid		(11,220	)		(10,333	)		(859	)		(862	)
Other		12			(20	)		-			-

Fair value of plan assets at end of year		214,981			190,547			-			-

Unfunded status at end of year	$	(112,597	)	$	(93,319	)	$	(4,785	)	$	(7,894	)

Amounts recognized in the balance sheet consist of:

	Pension Benefits						Other Benefits
(Thousands of dollars)	2012			2011			2012			2011

Other current accrued liabilities	$	(476	)	$	(383	)	$	(279	)	$	(379	)
Postretirement benefits		-			-			(4,506	)		(7,515	)
Pension benefits		(112,121	)		(92,936	)		-			-
	$	(112,597	)	$	(93,319	)	$	(4,785	)	$	(7,894	)

Amounts recognized in accumulated other comprehensive income consist of:

	Pension Benefits				Other Benefits
(Thousands of dollars)	2012		2011		2012			2011

Prior service cost	$	2,661	$	3,247	$	(1,950	)	$	245
Net loss (gain)		88,137		78,238		(1,089	)		(1,320	)
	$	90,798	$	81,485	$	(3,039	)	$	(1,075	)

The accumulated benefit obligation for all defined benefit pension plans was $301.1 million and $268.3 million at December 31, 2012, and 2011, respectively.

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income

	Pension Benefits									Other Benefits
(Thousands of dollars)	2012			2011			2010			2012			2011			2010

Net Periodic Benefit Cost

Service cost	$	10,209		$	6,881		$	5,654		$	176		$	129		$	92
Interest cost		12,147			11,842			11,585			311			347			350
Expected return on plan assets		(12,932	)		(13,564	)		(12,752	)		-			-			-
Amortization of prior service cost		930			946			785			51			51			51
Amortization of net loss (gain)		9,769			3,917			3,712			(186	)		(224	)		(291	)

Net periodic benefit cost	$	20,123		$	10,022		$	8,984		$	352		$	303		$	202

The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $9.8 million and $0.9 million, respectively. The estimated net gain and prior service cost for the defined benefit postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $0.1 million and $0.3 million, respectively.

Additional Information

Assumptions

Weighted-average assumptions used to determine benefit obligations at December 31

	Pension Benefits						Other Benefits
	2012			2011			2012			2011

Discount rate		3.58% - 3.77	%		4.09% - 4.19	%		3.75	%		4.05	%
Rate of compensation increase		4.80	%		4.90	%		N/A			N/A

Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31

	Pension Benefits									Other Benefits
	2012			2011			2010			2012			2011			2010

Discount rate		4.09% - 4.19	%		5.19% - 5.26	%		5.26% - 5.80	%		4.05	%		4.97	%		5.58	%
Expected long-term return on plan assets		6.80	%		6.80	%		6.80	%		N/A			N/A			N/A
Rate of compensation increase		4.80	%		4.90	%		5.12	%		N/A			N/A			N/A

Discount rates are estimated based upon a cash flow matching exercise against the Citigroup Pension Discount Curve. Guidance for determining this rate is taken from the yield on high-quality, long-term, corporate bonds.

For 2012, the Company assumed a long-term asset rate of return of 6.8%. In developing the 6.8% expected long-term rate of return assumption, the Company evaluated input from its third-party pension plan asset manager, including their review of asset class return expectations and long-term inflation assumptions. The Company also considered its historical 10-year and 15-year compounded return (period ended December 31, 2012), which were in-line to higher than the Company's long-term rate of return assumption, and analyzed expected long-term rate of return projections by asset class.

Plan Assets

The Company's qualified pension plan assets at December 31, 2012 are as follows:

Fair Value Measurements at December 31, 2012 (in thousands)

			Quoted Prices in		Significant		Significant
			Active markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Cash	$	7,678	$	7,678
Equity securities:
Common stock		53,559		53,559
International stock - commingled funds (a)		32,683			$	32,683
International stock - mutual fund		18,787		18,787
Fixed income securities:
U.S. Treasuries		12,160		12,160
Mortgage-backed securities		6,853				6,853
Collateralized mortgage obligations		596					$	596
Corporate bonds (b)		22,981				22,981
Other types of investments:
Equity long/short hedge funds (c)		37,010						37,010
Insurance policy (d)		675						675
Real Estate (e)		21,999						21,999

Total	$	214,981	$	92,184	$	62,517	$	60,280

(a)	This category represents International Equity Commingled Funds which invests in international stocks. Thebenchmark is the MSCI EAFE Index.

(b)	This category represents investment grade bonds of U.S. issuers from diverse industries.

(c)

This category includes hedge funds that invest both long and short in primarily U.S. common stocks.Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks, and from a net long position to a net short position; however it is expected that the equity long/short hedge funds will have a net long position.

(d)	This category includes a private insurance policy used for French retirement benefits.

(e)	This category includes a RREEF America II Fund and Black Rock Granite Properties which consists of commingledprivate real estate.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	Equity Long/Short				Insurance		Collateralized
	Hedge Funds		Real Estate		Contracts		Mortgage Obligations			Total

Beginning balance at December 31, 2011	$	35,288	$	21,001	$	645	$	2,156		$	59,090

Actual return on plan assets:
Relating to assets still held at the reporting date		1,722		998							2,720
Relating to assets sold during the period											-
Purchases, sales, and settlements								(1,560	)		(1,560	)
Other						30					30
Transfers in and/or out of Level 3											-

Ending balance at December 31, 2012	$	37,010	$	21,999	$	675	$	596		$	60,280

The Company invests in a diversified portfolio consisting of an array of assets classes that attempts to maximize returns while minimizing volatility. These asset classes include U.S. domestic equities, developed market equities, international equities, fixed income, real estate and hedged investments. Fixed income securities include medium-term government notes, corporate bonds and highly-rated mortgage-backed securities and collateralized mortgage obligations. Real estate primarily includes REIT investments focused on U.S. commercial warehouses. Hedge fund investments are primarily concentrated in funds focused on long/short investment strategies.

Equity Long/Short Hedge Funds

Hedge fund-of-funds are based on daily closing or institutional evaluation prices of underlying securities consistent with industry practices.

Real Estate

Real estate securities are valued based on recent market appraisals of underlying property as well as valuation methodologies to determine the most probable cash price in a competitive market.

Insurance Contracts

Insurance contracts are valued based upon underlying securities consistent with industry practices.

No equity or debt securities of the Company were held by the plan at December 31, 2012 or 2011.

The unqualified pension plans and the postretirement benefit plan of the Company are unfunded and thus had no plan assets as of December 31, 2012 and 2011.

Contributions

The Company expects to make contributions of $0.4 million to the pension plans and $0.2 million to the postretirement plan, in 2013. Due to pension funding legislation passed in 2012, the Company may not be required to make contributions to its U.S. qualified pension plan but may elect to make contributions of $10 to15 million.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the fiscal years ending:

	Pension		Other
(Thousands of dollars)	Benefits		Benefits

2013	$	12,687	$	249
2014		13,459		250
2015		14,323		251
2016		15,158		251
2017		16,129		253
2018 - 2022		92,957		1,267

The following table illustrates the balances of accumulated other comprehensive income:

				Defined			Defined			Accumulated
	Foreign			Benefit			Benefit			Other
	Currency			Pension			Postretirement			Comprehensive
(Thousands of dollars)	Translation			Plans			Plans			Loss

Balance, Dec. 31, 2010	$	5,077		$	(43,372	)	$	1,649		$	(36,646	)

Current-period change		(3,316	)		(38,441	)		(533	)		(42,290	)

Balance, Dec. 31, 2011		1,761			(81,813	)		1,116			(78,936	)

Current-period change		12,654			(9,701	)		1,964			4,917

Balance, Dec. 31, 2012	$	14,415		$	(91,514	)	$	3,080		$	(74,019	)