Employee Benefits

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

13 — EMPLOYEE BENEFITS

Defined contribution plan. The Company has a savings and investment plan (the “401k Plan”) covering substantially all U.S. 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 2012, the maximum match was $6,800. In addition, the Company, in its discretion, may also contribute at least 1% of an employee’s base compensation, subject to an IRS annual limitation, which was $2,500 for 2012. Amounts expensed in connection with the 401k Plan totaled $14.2 million, $15.9 million, and $14.6 million, in 2012, 2011, and 2010, 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 $27.8 million and $25.1 million at December 31, 2012 and 2011, respectively (see Note 12 — Fair Value Disclosures for fair value information). The corresponding deferred compensation liability of $31.3 million and $28.1 million at December 31, 2012 and 2011, 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 $0.4 million in 2012, $0.3 million in 2011, and zero in 2010.

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 defined benefit pension expense for the years ended December 31 (in thousands):

	2012			2011			2010
Service cost	$	1,775		$	1,890		$	1,875
Interest cost		980			1,010			840
Expected return on plan assets		(115	)		(125	)		—
Recognition of actuarial gain		(215	)		(135	)		(350	)
Recognition of termination benefits		175			65			65
Total defined benefit pension expense (1)	$	2,600		$	2,705		$	2,430

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

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

	2012			2011			2010
Weighted-average discount rate (1)		3.20	%		4.40	%		3.95	%
Average compensation increase		2.70	%		2.65	%		2.80	%

(1) 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):

	2012			2011			2010
Projected benefit obligation at beginning of year	$	21,160		$	19,730		$	14,358
Service cost		1,775			1,890			1,875
Interest cost		980			1,010			840
Actuarial loss (gain) due to assumption changes (1)		6,265			(948	)		1,100
Additions		1,925			—			1,961
Benefits paid (2)		(680	)		(390	)		(220	)
Foreign currency impact		180			(132	)		(184	)
Projected benefit obligation at end of year (3)	$	31,605		$	21,160		$	19,730

(1)	The 2012 actuarial loss was primarily due to a decline in the weighted-average discount rate.
(2)	The Company projects the following amounts will be paid in future years to plan participants: $0.5 million in 2013; $2.0 million in 2014; $0.8 million in 2015; $0.9 million in 2016; $1.2 million in 2017; and $7.0 million in the five years thereafter.
(3)	Measured as of December 31.

The following table provides information regarding the funded status of the plans and related amounts recorded in the Company’s Consolidated Balance Sheets as of December 31 (in thousands):

Funded status of the plans:

	2012			2011			2010
Projected benefit obligation	$	31,605		$	21,160		$	19,730
Plan assets at fair value (1)		(8,885	)		(2,480	)		(2,130	)
Funded status – shortfall (2)	$	22,720		$	18,680		$	17,600
Amounts recorded in the Consolidated Balance Sheets for the plans:
Other liabilities — accrued pension obligation (2)	$	22,720		$	18,680		$	17,600
Stockholders’ equity — deferred actuarial (loss) gain (3)	$	(1,578	)	$	2,488		$	2,205

(1)	The plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high quality government and corporate 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 low-to-medium investment risk. For the year-ended December 31, 2012, the Company contributed $6.4 million to these plans, and benefits paid to participants was $0.7 million. While the actual return on plan assets for these plans was effectively zero in 2012, the Company projects a future long-term rate of return on these plan assets of 3.6%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions.
	In addition to the plan assets held with third-party trustees, the Company also maintains a reinsurance asset arrangement with a large international insurance company. The reinsurance asset is an asset of the Company whose purpose is to provide funding for benefit payments for one of the plans. At December 31, 2012, the reinsurance asset was carried on the Company’s Consolidated Balance Sheets at its cash surrender value of $8.8 million and is classified in Other Assets. The Company believes the cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value framework in ASC Topic 820.
(2)	The Funded status — shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. This amount is a liability of the Company and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheets.
(3)	The deferred actuarial loss as of December 31, 2012, is recorded in Accumulated Other Comprehensive Income (“AOCI”) and will be reclassified out of AOCI and recognized as pension expense over approximately 14 years, subject to certain limitations set forth in FASB ASC Topic 715. The impact of this amortization on the periodic pension expense in 2013 will be immaterial. For 2012, 2011, and 2010, approximately $0.2 million, $0.1 million, and $0.2 million, respectively, of deferred actuarial pension gains were reclassified from AOCI to pension expense. The Company considers the impact of the reclassifications for those years to be immaterial.