Pensions And Other Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Pensions And Other Postretirement Benefits [Abstract]

Pensions And Other Postretirement Benefits

Note 11—Pensions and Other Postretirement Benefits

We maintain various defined benefit and defined contribution plans covering the majority of our employees. Our principal U.S. plan is funded in compliance with the Employee Retirement Income Security Act (ERISA). It is our general policy to fund current costs for the international plans, except in Germany and Mexico, where it is common practice and permissible under tax laws to accrue book reserves.

We provide health care benefits and limited life insurance for certain retired employees who are covered by our principal U.S. defined benefit pension plan until they become Medicare-eligible.

Information pertaining to defined benefit pension plans and other postretirement benefits plans is provided in the following table:

	Pension Benefits						Other Benefits
(In thousands)	2011			2010			2011			2010
Change in Benefit Obligations
Benefit obligations at January 1	$	349,755		$	330,757		$	32,734		$	30,014
Service cost		8,674			7,702			785			763
Interest cost		19,531			18,615			1,501			1,729
Participant contributions		153			137			—			—
Actuarial losses (gains)		37,973			14,441			(2,281	)		2,011
Benefits paid		(18,931	)		(17,249	)		(2,314	)		(1,783	)
Curtailments		(54	)		(1,057	)		—			—
Termination benefits		—			926			—			—
Currency translation		(2,832	)		(4,517	)		—			—
Benefit obligations at December 31		394,269			349,755			30,425			32,734
Change in Plan Assets
Fair value of plan assets at January 1		377,607			342,874			—			—
Actual return on plan assets		(4,428	)		48,001			—			—
Employer contributions		4,259			3,501			2,314			1,783
Participant contributions		153			137			245			234
Transfers		—			—			—			—
Benefits paid		(16,308	)		(14,659	)		(2,559	)		(2,017	)
Reimbursement of German benefits		(2,622	)		(2,589	)		—			—
Currency translation		(694	)		342			—			—
Fair value of plan assets at December 31		357,967			377,607			—			—
Funded Status
Funded status at December 31		(36,302	)		27,851			(30,425	)		(32,734	)
Unrecognized transition losses		24			42			—			—
Unrecognized prior service cost		808			923			(3,072	)		(3,527	)
Unrecognized net actuarial losses		158,425			82,903			12,212			15,202
Net amount recognized		122,955			111,719			(21,285	)		(21,059	)
Amounts Recognized in the Balance Sheet
Noncurrent assets		58,075			121,631			—			—
Current liabilities		(4,722	)		(4,779	)		(2,096	)		(2,538	)
Noncurrent liabilities		(89,655	)		(89,001	)		(28,329	)		(30,196	)
Net amount recognized		(36,302	)		27,851			(30,425	)		(32,734	)
Amounts Recognized in Accumulated Other Comprehensive Income
Net actuarial losses		158,425			82,903			12,212			15,202
Prior service cost (credit)		808			923			(3,072	)		(3,527	)
Unrecognized net initial obligation		24			42			—			—
Total (before tax effects)		159,257			83,868			9,140			11,675
Accumulated Benefit Obligations for all Defined Benefit Plans		347,636			332,544			—			—

	Pension Benefits									Other Benefits
(In thousands)	2011			2010			2009			2011			2010			2009
Components of Net Periodic Benefit (Credit) Cost
Service cost	$	8,674		$	7,702		$	7,229		$	785		$	763		$	719
Interest cost		19,531			18,615			18,477			1,501			1,730			1,836
Expected return on plan assets		(34,125	)		(34,565	)		(35,273	)		—			—			—
Amortization of transition amounts		4			4			6			—			—			—
Amortization of prior service cost		104			103			153			710			840			1,001
Recognized net actuarial losses (gains)		793			537			245			(455	)		(555	)		(401	)
Curtailment loss		52			287			97			—			—			—
Termination benefits		—			926			6,411			—			—			250
Net periodic benefit (credit) cost		(4,967	)		(6,391	)		(2,655	)		2,541			2,778			3,405

Amounts included in accumulated other comprehensive income expected to be recognized in 2012 net periodic benefit costs.

(In thousands)	Pension Benefits		Other Benefits
Loss recognition	$	7,020	$	720
Prior service cost (credit) recognition		102		(455	)
Transition obligation recognition		2		—

	Pension Benefits						Other Benefits
	2011			2010			2011			2010
Assumptions used to determine benefit obligations
Discount rate		5.0	%		5.6	%		4.8	%		5.3	%
Rate of compensation increase		3.9	%		3.7	%		—			—
Assumptions used to determine net periodic benefit cost
Discount rate		5.6	%		5.8	%		5.3	%		6.0	%
Expected return on plan assets		8.3	%		8.3	%		—			—
Rate of compensation increases		3.7	%		3.8	%		—			—

Discount rates were determined using various corporate bond indexes as indicators of interest rate levels and movements and by matching our projected benefit obligation payment stream to current yields on high quality bonds.

The expected return on assets for the 2011 net periodic pension cost was determined by multiplying the expected returns of each asset class (based on historical returns) by the expected percentage of the total portfolio invested in that asset class. A total return was determined by summing the expected returns over all asset classes.

	Pension Plan Assets at December 31
	2011			2010
Equity securities		60	%		73	%
Fixed income securities		29			15
Pooled investment funds		6			5
Insurance contracts		3			3
Cash and cash equivalents		2			4
Total		100	%		100	%

The overall objective of our pension investment strategy is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and meet other cash requirements of our pension funds. Investment policies for our primary U.S. pension plan are determined by the plan's Investment Committee and set forth in the plan's investment policy. Asset managers are granted discretion for determining sector mix, selecting securities and timing transactions, subject to the guidelines of the investment policy. An aggressive, flexible management of the portfolio is permitted and encouraged, with shifts of emphasis among equities, fixed income securities and cash equivalents at the discretion of each manager. No target asset allocations are set forth in the investment policy. For our non-U.S. pension plans, our investment objective is generally met through the use of pooled investment funds and insurance contracts.

The following table summarizes our pension plan assets measured at fair value on a recurring basis by fair value hierarchy level:

	December 31, 2011
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Equity securities	$	216,198	$	—	$	—	$	216,198
Fixed income securities		34,636		68,087		—		102,723
Pooled investment funds		—		19,765		—		19,765
Insurance contracts ents		—		—		11,562		11,562
Cash and cash equivalents		7,719		—		—		7,719
Total		258,553		87,852		11,562		357,967

	December 31, 2010
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Equity securities	$	274,918	$	—	$	—	$	274,918
Fixed income securities		9,218		49,401		—		58,619
Pooled investment funds		—		19,338		—		19,338
Cash and cash equivalents		14,007		—		—		14,007
Insurance contracts		—		—		10,725		10,725
Total		298,143		68,739		10,725		377,607

Equity securities consist primarily of publicly traded U.S. and non-U.S. common stocks. Equities are valued at closing prices reported on the listing stock exchange.

Fixed income consists primarily of U.S. government and agency bonds and U.S. corporate bonds. Fixed income securities are valued at closing prices reported in active markets or based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, and may include adjustments, for certain risks that may not be observable, such as credit and liquidity risks.

Pooled investment funds consist of mutual and collective investment funds that invest primarily in publicly traded non-U.S. equity and fixed income securities. Pooled investment funds are valued at net asset values calculated by the fund manager based on fair value of the underlying securities. The underlying securities are generally valued at closing prices reported in active markets, quoted prices of similar securities, or discounted cash flows approach that maximizes observable inputs such as current value measurement at the reporting date.

Insurance contracts are valued in accordance with the terms of the applicable collective pension contract.

Cash equivalents consist primarily of money market and similar temporary investment funds. Cash equivalents are valued at closing prices reported in active markets.

The preceding methods may produce fair value measurements that are not indicative of net realizable value or reflective of future fair values. Although we believe the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table presents a reconciliation of Level 3 assets:

(In thousands)	Insurance Contracts
Balance January 1, 2010	$	9,878
Net realized and unrealized losses included in earnings		(406	)
Net purchases, issuances and settlements		1,253
Balance December 31, 2010		10,725
Net realized and unrealized losses included in earnings		(325	)
Net purchases, issuances and settlements		1,162
Balance December 31, 2011		11,562

We expect to make net contributions of $4.1 million to our pension plans in 2012.

For measurement purposes, a 9.0% increase in the costs of covered health care benefits was assumed for the year 2011, decreasing by 0.5% for each successive year to 4.5% in 2018 and thereafter. A one-percentage-point change in assumed health care cost trend rates would have increased or decreased the other postretirement benefit obligations and current year plan expense by approximately $1.8 million and $1.9 million, respectively.

Expense for defined contribution pension plans was $5.7 million in 2011, $5.2 million in 2010 and $3.1 million in 2009.

Estimated pension benefits to be paid under our defined benefit pension plans during the next five years are $18.9 million in 2012, $19.5 million in 2013, $19.3 million in 2014, $20.1 million in 2015, $22.4 million in 2016, and are expected to aggregate $117.4 million for the five years thereafter. Estimated other postretirement benefits to be paid during the next five years are $2.1 million in 2012, $2.2 million in 2013, $2.1 million in 2014, $2.2 million in 2015, $2.3 million in 2016 and are expected to aggregate $12.6 million for the five years thereafter.