Retirement Plans

12 Months Ended

Dec. 31, 2011

Retirement Plans

Retirement Plans

Note 16—Retirement Plans

Defined Benefit Plans

        The Company maintains defined benefit retirement plans for certain employees. Benefits are based primarily on years of service and earnings of the employee. The Company recognizes the funded status of its defined benefit pension plans in the Consolidated Balance Sheets. The funded status is the difference between the retirement plans' projected benefit obligation and the fair value of the retirement plans' assets as of the measurement date.

        Included in Accumulated other comprehensive income, net of tax at December 31, 2011, are the following amounts that have not yet been recognized in net periodic pension costs: unrecognized actuarial losses of $61.5 million ($38.4 million, net of tax) and unrecognized prior service cost of $1.9 million ($1.2 million, net of tax). The prior service cost and actuarial loss included in Accumulated other comprehensive income and expected to be recognized in net periodic pension cost during the year ended December 31, 2012, are $0.2 million credit ($0.1 million credit, net of tax) and $5.0 million ($3.1 million, net of tax) respectively.

        The reconciliation of the beginning and ending balances of the projected pension benefit obligation, the fair value of the plan assets and the ending accumulated benefit obligation are as follows:

In millions	2011			2010
Funded status
Projected benefit obligation
Beginning of year	$	214.2		$	172.4
Change in benefit obligation:
Service cost		5.2			5.4
Interest cost		10.7			9.5
Plan amendments		1.4			—
Actuarial loss		4.0			4.7
Benefits paid		(20.6	)		(12.3	)
Foreign Currency		(0.1	)		—
Assumed obligation from Hawk acquisition		—			34.5
End of year		214.8			214.2
Fair value of plan assets
Beginning of year		202.4			157.2
Change in plan assets:
Actual return on plan assets		24.6			20.2
Company contributions		5.3			5.0
Benefits paid		(20.6	)		(12.3	)
Assumed assets from Hawk acquisition		—			32.3
End of year		211.7			202.4
(Unfunded) funded status end of year	$	(3.1	)	$	(11.8	)
Accumulated benefit obligation at end of year	$	(211.1	)	$	(210.0	)

        The accumulated benefit obligation differs from the projected pension benefit obligation in that it includes no assumption about future compensation levels. The Company's net unfunded status at December 31, 2011 includes approximately $16.2 million related to the Company's executive supplemental and director defined benefit pension plans. The executive supplemental and director defined benefit plans have no plan assets and the Company is not required to fund the obligations. The U.S. plans required to be funded by the Company were fully funded at December 31, 2011.

        The fair value of the plans' assets at December 31, 2011 and 2010 by asset category are as follows:

	Fair Value Measurements at December 31, 2011
Asset Category (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Mutual funds
Equity mutual funds(1)	$	25.2	$	1.5	$	—	$	26.7
Fixed income mutual funds(2)		176.1		8.9		—		185.0
Total	$	201.3	$	10.4	$	—	$	211.7

	Fair Value Measurements at December 31, 2010
Asset Category (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash	$	3.9	$	—	$	—	$	3.9
Equity securities:
US company(3)		9.0		—		—		9.0
Mutual funds:
Equity mutual funds(1)		26.7		13.2		—		39.9
Fixed income mutual funds(2)		147.2		2.4		—		149.6
Total	$	186.8	$	15.6	$	—	$	202.4

(1)

This category is comprised of investments in mutual funds that invest in equity securities such as large publicly traded companies listed in the S&P 500 Index; small to medium sized companies with market capitalization in the range of the Russell 2500 Index; and foreign issuers in emerging markets.

(2)

This category is comprised of investments in mutual funds that invest in U.S. corporate and government fixed income securities, including asset-backed securities; high yield fixed income securities primarily rated BB, B, CCC, CC, C and D; and US dollar denominated debt securities of government, government related and corporate issuers in emerging market countries.

(3)

This category represents investment in common shares of Carlisle Companies.

        The Company employs a liability driven investment approach whereby plan assets are invested primarily in fixed income investments to match the changes in the plan liabilities that occur as a result of changes in the discount rate. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The established target allocation is 88% fixed income securities and 12% equity securities. Fixed income investments are diversified across core fixed income, long duration and high yield bonds. Equity investments are diversified across large capitalization U.S. and international stocks. Investment risk is measured and monitored on an ongoing basis through investment portfolio reviews, annual liability measures and asset/liability studies.

        The net asset (liability) consists of the following amounts recorded on the Company's balance sheet at December 31, 2011 and 2010:

In millions	2011			2010
Noncurrent assets	$	13.1		$	4.3
Current liabilities		(1.1	)		(1.1	)
Noncurrent liabilities		(15.1	)		(15.0	)
Asset (liability) at end of year	$	(3.1	)	$	(11.8	)

        The Company made contributions of $5.3 million to the pension plans during 2011, of which $1.1 million was contributed the Company's executive supplemental and director defined benefit pension plans in the form of participant benefits as these plans have no plan assets. No minimum contributions to the Company's pension plans are required in 2012. However, during 2012 the Company expects to pay approximately $1.1 million in participant benefits under the executive supplemental and director plans and make discretionary contributions of approximately $4.2 million to the other pension plans to maintain fully funded status as participants continue to earn benefits.

        Components of net periodic benefit cost for the years ended December 31 are as follows:

In millions	2011			2010			2009
Service cost	$	5.2		$	5.4		$	5.0
Interest cost		10.7			9.5			10.5
Expected return on plan assets		(14.7	)		(12.8	)		(12.3	)
Curtailment gain		(0.1	)		—			0.1
Amortization of unrecognized net loss		4.6			2.6			1.2
Amortization of unrecognized prior service credit		(0.1	)		(0.1	)		(0.1	)
Net periodic benefit cost	$	5.6		$	4.6		$	4.4

        Weighted-average assumptions for benefit obligations at December 31 are as follows:

	2011			2010
Discount rate		4.79	%		5.17	%
Rate of compensation increase		3.56	%		4.29	%
Expected long-term return on plan assets		7.00	%		7.00	%

        The Company bases its discount rate assumptions on a yield curve which provides better matching of the expected future retirement plan cash flows with projected yields.

        Weighted-average assumptions for net periodic benefit cost for the years ended December 31 are outlined below:

	2011			2010			2009
Discount rate		5.14	%		5.68	%		5.68	%
Rate of compensation increase		4.29	%		4.29	%		4.29	%
Expected long-term return on plan assets		7.00	%		7.00	%		7.00	%

        The Company considers several factors in determining the long-term rate of return for plan assets. Current market factors such as inflation and interest rates are evaluated and consideration is given to the diversification and rebalancing of the portfolio. The Company also looks to peer data and historical returns for reasonability and appropriateness.

Post-retirement Welfare Plans

        The Company also has a limited number of unfunded post-retirement welfare programs. The Company's liability for post-retirement medical benefits is limited to a maximum obligation; therefore, the Company's liability is not materially affected by an assumed health care cost trend rate.

        Included in Accumulated other comprehensive income, net of tax at December 31, 2011, are the following amounts that have not yet been recognized in net periodic retiree medical costs: unrecognized prior service cost of $0.4 million ($0.3 million, net of tax) and unrecognized net obligation of $1.2 million ($0.7 million, net of tax).The prior service cost and net obligation included in Accumulated other comprehensive income and expected to be recognized in net periodic benefit cost during the year ended December 31, 2012, are $0.1 million ($0.1 million, net of tax) and $0.1 million ($0.1 million, net of tax) respectively.

        The reconciliation of the beginning and ending balances of the projected post-retirement benefit obligation is as follows:

In millions	2011			2010			2009
Benefit obligation at beginning of year	$	3.9		$	3.4		$	2.5
Interest cost		0.2			0.2			0.2
Plan Amendments		—			—			0.6
Participant contributions		0.2			—			—
Actuarial loss		0.1			0.6			0.2
Benefits paid		(0.4	)		(0.3	)		(0.1	)
Benefit obligation at end of year	$	4.0		$	3.9		$	3.4

        The Company's 2011 disclosures for its post-retirement medical benefit programs are determined based on a December 31 measurement date. The net liability consists of the following amounts recorded on the Company's balance sheet at December 31, 2011 and 2010:

In millions	2011			2010
Current liabilities	$	(0.3	)	$	(0.3	)
Noncurrent liabilities		(3.7	)		(3.6	)
Liability at end of year	$	(4.0	)	$	(3.9	)

        Company contributions in 2012 are expected to approximate 2011 contributions of $0.3 million.

        The Company's post-retirement medical benefit obligations were determined using a weighted-average assumed discount rate of 4.73% and 5.17% at December 31, 2011 and 2010, respectively. The Company bases its discount rate assumptions on a yield curve which provides better matching of the expected future retirement plan cash flows with projected yields. The Company also utilized a weighted-average health care cost trend rate in determining the post-retirement medical benefit obligation. For the 2011 valuation, the assumed health care cost trend rate for Pre-65 is 7.50%, and Post-65 was an initial rate of 8.00% trending to an ultimate rate of 5.00% by 2017.

        Components of net periodic post-retirement benefit costs for the years ended December 31 are as follows:

In millions	2011		2010		2009
Interest cost	$	0.2	$	0.2	$	0.2
Amortization of prior service cost		0.1		0.1		0.1
Amortization of unrecognized net obligation		0.1		0.1		0.2
Net periodic benefit cost	$	0.4	$	0.4	$	0.5

        The Company's post-retirement medical benefit cost for 2011, 2010 and 2009 was determined using a weighted-average assumed discount rate of 5.17%, 5.62%, and 6.73%, respectively.

        The following is a summary of estimated future benefits to be paid for the Company's defined benefit pension plan and post-retirement medical plan at December 31, 2011. Benefit payments are estimated based on the same assumptions used in the valuation of the projected benefit obligation:

In millions Year	Defined Benefit Retirement Plan		Post-Retirement Medical Plan
2012		16.4		0.3
2013		17.7		0.3
2014		16.5		0.3
2015		17.0		0.3
2016		16.6		0.3
2017 - 2021		83.4		1.4

Defined Contribution and ESOP Plan

        Additionally, the Company maintains defined contribution plans covering a significant portion of its employees. Expenses for the plans were approximately $10.7 million in 2011, $9.5 million in 2010 and $8.8 million in 2009. The Company also sponsors an employee stock ownership plan ("ESOP") as part of one of its existing savings plans. Costs for the ESOP are included in the previously stated expenses. The ESOP is available to eligible domestic employees and includes a match of contributions made by plan participants to the savings plan up to a maximum of 4.00% of a participant's eligible compensation, divided between cash and an employee-directed election of the Company's common stock, not to exceed 50% of the total match, for non-union employees. Union employees' match may vary and is based on negotiated union agreements. Participants are not allowed to direct their contributions to the savings plan to an investment in the Company's common stock. A breakdown of shares held by the ESOP at December 31 is as follows:

In millions	2011		2010		2009
Shares held by the ESOP		1.9		2.0		2.4