EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2011

EMPLOYEE BENEFITS

13 — EMPLOYEE BENEFITS

Savings and investment plan. The Company has a savings and investment plan covering substantially all domestic employees. Company contributions are based upon the level of employee contributions, up to a maximum of 4% of the employee’s eligible salary, subject to an annual maximum. For 2011, the maximum match was $6,600. In addition, the Company may also contribute at least 1% of an employee’s base compensation, subject to an IRS annual limitation of $2,450 for 2011. Amounts expensed in connection with the plan totaled $15.9 million, $14.6 million, and $13.0 million, in 2011, 2010, and 2009, respectively.

Deferred compensation plan. The Company has a supplemental deferred compensation plan for the benefit of certain highly compensated officers, managers and other key employees, which is structured as a rabbi trust. The plan’s investment assets are classified in Other assets on the Consolidated Balance Sheets at fair value. The value of these assets was $25.1 million and $24.1 million at December 31, 2011 and 2010, respectively (see Note 12 — Fair Value Disclosures for a description regarding the determination of fair value for these assets). The corresponding deferred compensation liability of $28.1 million and $26.9 million at December 31, 2011 and 2010, respectively, is carried at fair value, and is adjusted with a corresponding charge or credit to compensation cost to reflect the fair value of the amount owed to the employees which is classified in Other liabilities on the Consolidated Balance Sheets. Total compensation expense recognized for the plan was $0.3 million in 2011, zero in 2010, and $0.1 million in 2009.

Defined benefit pension plans. The Company has defined-benefit pension plans in several of its non-U.S. locations. Benefits earned under these plans are based on years of service and level of employee compensation. The Company accounts for defined benefit plans in accordance with the requirements of FASB ASC Topics 715 and 960.

The following are the components of net periodic pension expense for the years ended December 31 (in thousands):

	2011			2010			2009
Service cost	$	1,890		$	1,875		$	1,465
Interest cost		1,010			840			742
Expected return on plan assets		(125	)		—			—
Recognition of actuarial gain		(135	)		(350	)		(200	)
Recognition of termination benefits		65			65			192
Net periodic pension expense (1)	$	2,705		$	2,430		$	2,199

(1) Pension expense is classified in SG&A in the Consolidated Statements of Operations.

The following are the assumptions used in the computation of net periodic pension expense for the years ended December 31:

	2011			2010			2009
Weighted-average discount rate		4.40	%		3.95	%		4.85	%
Average compensation increase		2.65	%		2.80	%		3.27	%

Discount rates are typically determined by utilizing the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.

The following table provides information related to changes in the projected benefit obligation for the years ended December 31 (in thousands):

	2011			2010			2009
Projected benefit obligation at beginning of year	$	19,730		$	14,358		$	13,286
Service cost		1,890			1,875			1,465
Interest cost		1,010			840			742
Actuarial (gain) loss		(948	)		1,100			(1,034	)
Addition of foreign pension plan (1)		—			1,961			—
Benefits paid (2)		(390	)		(220	)		(562	)
Foreign currency impact		(132	)		(184	)		461
Projected benefit obligation at end of year (3)	$	21,160		$	19,730		$	14,358

(1)	The Company adopted the defined benefit pension plan accounting provisions of FASB ASC Topics 715 and 960 for a non-U.S. plan on December 31, 2010. Previously the Company had accounted for this plan in accordance with local statutory accounting requirements. The adoption of FASB ASC Topics 715 and 960 for this plan did not result in the recognition of additional expense.
(2)	The Company projects the following amounts will be paid in future years to plan participants: $0.4 million in 2012; $1.2 million in 2013; $1.3 million in 2014; $0.8 million in 2015; $0.9 million in 2016; and $6.5 million in the five years thereafter.
(3)	Measured as of December 31.

The following table provides information regarding the plan projected benefit obligation and other amounts recorded in the Consolidated Balance Sheets as of December 31 (in thousands):

	2011			2010			2009
Projected benefit obligation	$	21,160		$	19,730		$	14,358
Plan assets at fair value (1)		(2,480	)		(2,130	)		—
Funded status – shortfall (2)	$	18,680		$	17,600		$	14,358
Amounts recorded in the Consolidated Balance Sheets:
Other assets — reinsurance asset (3)	$	12,980		$	11,680		$	10,451
Other liabilities — accrued pension obligation (2)	$	18,680		$	17,600		$	14,358
Stockholders’ equity — unrealized actuarial gain (4)	$	2,488		$	2,205		$	3,217

(1)	Consists of the assets of a non-U.S. plan for which the Company adopted the accounting provisions of FASB ASC Topics 715 and 960 on December 31, 2010. These assets are considered assets of the plan for accounting purposes and are thus not recorded on the Company’s Consolidated Balance Sheets. The assets are maintained with a third-party insurance company and are invested in a diversified portfolio of equities, bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, and the Company considers the overall portfolio of these assets to be of medium investment risk. The projected long-term rate of return on these plan assets was 4.1% as of December 31, 2011. For the year-ended December 31, 2011, the Company contributed $0.6 million to this plan, the actual return on plan assets was $(0.1) million, and benefits paid to participants was $0.1 million.
(2)	The funded status — shortfall represents the amount of the projected benefit obligation that the Company has not funded. This amount is recorded as a liability in Other Liabilities on the Company’s Consolidated Balance Sheets. The Company expects to contribute approximately $0.6 million to these plans in 2012.
(3)	Consists of a reinsurance asset arrangement with a large international insurance company that was rated investment grade as of December 31, 2011. The purpose of the reinsurance asset arrangement is to fund the benefit payments under one of the Company’s foreign defined benefit pension plans. However, the reinsurance asset is not legally segregated or restricted for purposes of meeting the pension obligation and as a result is not acknowledged as a pension plan asset under U.S. GAAP. As a result, the reinsurance asset is carried on the Company’s Consolidated Balance Sheets at its cash surrender value, which the Company believes reasonably approximates its fair value.

(4) The balance recorded in Stockholders’ Equity, net of tax represents the plan’s net unrealized actuarial gain which will be amortized against net periodic pension cost, thereby reducing the amount of the charge, over approximately 15 years. Amortization of the unrealized gain at December 31, 2011 is projected to reduce the Company’s net periodic pension cost in 2012 by approximately $0.2 million.