Employee and Retiree Benefit Plans

3 Months Ended

Mar. 31, 2013

Compensation And Retirement Disclosure [Abstract]

Employee and Retiree Benefit Plans

Note G – Employee and Retiree Benefit Plans

The Company has defined benefit pension plans that are principally noncontributory and cover most full-time employees. All pension plans are funded except for the U.S. and Canadian nonqualified supplemental plans and the U.S. directors’ plan. All U.S. tax qualified plans meet the funding requirements of federal laws and regulations. Contributions to foreign plans are based on local laws and tax regulations. The Company also sponsors health care benefit plans, which are not funded, that cover most active and retired U.S. employees. Additionally, most U.S. retired employees are covered by a life insurance benefit plan. The health care benefits are contributory; the life insurance benefits are noncontributory.

The table that follows provides the components of net periodic benefit expense for the three-month periods ended March 31, 2013 and 2012.

	Three Months Ended March 31,
	Pension Benefits						Other Postretirement Benefits
(Thousands of dollars)	2013			2012			2013			2012
Service cost	$	7,603			5,888			1,167			1,041
Interest cost		6,431			7,292			1,234			1,449
Expected return on plan assets		(5,700	)		(6,305	)		0			0
Amortization of prior service cost		276			312			(42	)		(46	)
Amortization of transitional liability		120			111			2			2
Recognized actuarial net loss		3,532			3,767			457			489
Net periodic benefit expense	$	12,262			11,065			2,818			2,935

During the three-month period ended March 31, 2013, the Company made contributions of $17.4 million to its defined benefit pension and postretirement benefit plans. Remaining funding in 2013 for the Company’s defined benefit pension and postretirement plans is anticipated to be $31.1 million.

In March 2010, the United States Congress enacted a health care reform law. Along with other provisions, the law (a) eliminates the tax free status of federal subsidies to companies with qualified retiree prescription drug plans that are actuarially equivalent to Medicare Part D plans beginning in 2013; (b) imposes a 40% excise tax on high-cost health plans as defined in the law beginning in 2018; (c) eliminated lifetime or annual coverage limits and required coverage for preventative health services beginning in September 2010; and (d) imposed a fee of $2 (subsequently adjusted for inflation) for each person covered by a health insurance policy beginning in September 2010. The Company provides a health care benefit plan to eligible U.S. employees and most U.S. retired employees. The new law did not significantly affect the Company’s consolidated financial statements as of March 31, 2013 and December 31, 2012 and for the three-month periods ended March 31, 2013 and 2012. The Company continues to evaluate the various components of the law as further guidance is issued and cannot predict with certainty all the ways it may impact the Company. However, based on the evaluation performed to date, the Company currently believes that the health care reform law will not have a material effect on its financial condition, net income or cash flow in future periods.