PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2011

Pension and Other Postretirement Benefit Expense [Abstract]

Changes in benefit obligations and plan assets and funded status and weighted-average assumptions used to determine the benefit obligation

The following table presents the changes in benefit obligations and plan assets for 2011 and 2010 and the funded status and weighted-average assumptions used to determine the benefit obligation at each year end (dollars in thousands):

	2011									2010
	Pension benefits			Other benefits			Total			Pension benefits			Other benefits			Total
Benefit obligations:
Balance, January 1	$	581,329		$	82,527		$	663,856		$	532,328		$	81,186		$	613,514
Interest cost		31,359			4,122			35,481			30,713			4,284			34,997
Service cost		11,882			2,011			13,893			14,411			1,955			16,366
Actuarial (gain) loss		86,200			6,757			92,957			31,417			(1,310	)		30,107
Special termination benefits		104			396			500			-			-			-
Plan curtailments		4,690			(5,773	)		(1,083	)		(5,398	)		-			(5,398	)
Benefits paid		(25,213	)		(2,981	)		(28,194	)		(22,142	)		(3,588	)		(25,730	)
Balance, December 31		690,351			87,059			777,410			581,329			82,527			663,856
Plan assets:
Fair value, January 1		421,940			-			421,940			337,282			-			337,282
Actual return		(1,715	)		-			(1,715	)		49,535			-			49,535
Employer contributions		53,394			-			53,394			57,265			-			57,265
Benefits paid		(25,213	)		-			(25,213	)		(22,142	)		-			(22,142	)
Fair value, December 31		448,406			-			448,406			421,940			-			421,940
Net benefit liabilities	$	(241,945	)	$	(87,059	)	$	(329,004	)	$	(159,389	)	$	(82,527	)	$	(241,916	)
Amounts recognized in Consolidated Balance Sheet:
Accrued liabilities	$	(50,554	)	$	(4,690	)	$	(55,244	)	$	(52,735	)	$	(4,510	)	$	(57,245	)
Other liabilities (long-term)		(191,391	)		(82,369	)		(273,760	)		(106,654	)		(78,017	)		(184,671	)
Net benefit liabilities	$	(241,945	)	$	(87,059	)	$	(329,004	)	$	(159,389	)	$	(82,527	)	$	(241,916	)
Net (expense) credit recognized in net benefit cost	$	91,495		$	(73,312	)	$	18,183		$	50,937		$	(69,015	)	$	(18,078	)
Amounts not yet reflected in net periodic benefit cost:
Actuarial loss		(370,098	)		(13,599	)		(383,697	)		(269,690	)		(12,847	)		(282,537	)
Transition obligation		-			(474	)		(474	)		-			(1,324	)		(1,324	)
Prior service credit		36,658			326			36,984			59,364			659			60,023
Total accumulated other comprehensive loss		(333,440	)		(13,747	)		(347,187	)		(210,326	)		(13,512	)		(223,838	)
Net benefit liabilities	$	(241,945	)	$	(87,059	)	$	(329,004	)	$	(159,389	)	$	(82,527	)	$	(241,916	)
Weighted-average assumptions:
Discount rate		4.56	%		4.46	%					5.45	%		5.26	%
Rate of compensation increase		4.15	%								4.15	%

Accumulated benefit obligations

 The ABO at December 31 for all pension plans in the aggregate is presented below (in thousands):

	2011		2010
Accumulated benefit obligation	$	690,148	$	581,141

Amounts amortized from accumulated other comprehensive to net periodic benefits cost

Rowan expects that the following amounts, which are classified in accumulated other comprehensive loss, a component of stockholders' equity, will be recognized as net periodic benefits cost in 2012 (in thousands):

	Pension benefits			Other retirement benefits			Total
Actuarial loss	$	24,947		$	341		$	25,288
Transition obligation		-			475			475
Prior service cost (credit)		(4,647	)		(147	)		(4,794	)
Total amortization	$	20,300		$	669		$	20,969

Components of net periodic pension cost and weighted-average assumptions used to determine net cost

The components of net periodic pension cost and the weighted-average assumptions used to determine net cost were as follows (dollars in thousands):

	2011			2010			2009
Service cost	$	11,882		$	14,411		$	15,941
Interest cost		31,359			30,713			32,477
Expected return on plan assets		(34,008	)		(30,640	)		(28,875	)
Recognized actuarial loss		21,515			19,393			16,277
Amortization of prior service cost		(6,001	)		(6,677	)		(3,465	)
Curtailment (gain) loss recognized		(12,014	)		-			-
Special termination benefit recognized		104			-			-
Net periodic pension cost	$	12,837		$	27,200		$	32,355
Less: Discontinued operations		6,598			(12,765	)		(16,139	)
Continuing operations	$	19,435		$	14,435		$	16,216
Discount rate		5.36	%		5.97	%		6.41	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%
Rate of compensation increase		4.15	%		4.15	%		4.15	%

The components of net periodic cost of other postretirement benefits and the weighted average discount rate used to determine net cost were as follows (dollars in thousands):

	2011			2010			2009
Service cost	$	2,011		$	1,955		$	2,040
Interest cost		4,122			4,284			4,594
Recognized actuarial loss		233			64			216
Amortization of transition obligation		600			662			662
Amortization of prior service cost		(185	)		(204	)		(204	)
Special termination benefit recognized		396			-			-
Curtailment loss recognized		102			-			-
Net periodic cost of other postretirement benefits	$	7,279		$	6,761		$	7,308
Less: Discontinued operations		(1,618	)		(2,390	)		(2,570	)
Continuing operations	$	5,661		$	4,371		$	4,738
Discount rate		5.14	%		5.83	%		6.34	%

Effect of one-percentage-point change in assumed health care cost trend rates

A one-percentage-point change in the assumed health care cost trend rates would change the reported amounts as follows (in thousands):

	One-percentage-point change
	Increase		Decrease
Effect on total service and interest cost components for the year	$	538	$	(461	)
Effect on postretirement benefit obligation at year-end		5,220		(4,612	)

Target allocations among asset categories and fair values of each category of plan assets, classified by level within fair value hierarchy

The plans will periodically reallocate assets in accordance with the allocation targets, after giving consideration to the expected level of cash required to pay current benefits and plan expenses (dollars in thousands):

	Target allocation - % of Plan assets	Target allocation - % of  category	Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 31, 2011:
Equity securities:	62.5% to 72.5%
S&P 500 Stock Index		22.5% to 52.5%	$	168,910	$	168,910	$	-	$	-
Small cap growth		0% to 10%		22,462		22,462		-		-
Small cap value		0% to 10%		20,425		20,425		-		-
International		10% to 30%		77,270		-		77,270		-
Fixed income:	22.5% to 32.5%
Cash and equivalents		0% to 10%		11,442		1		11,441		-
Aggregate fixed income		10% to 16%		64,703		-		64,703		-
Core plus fixed income		7.5% to 17.5%		61,243		61,243		-		-
Real estate	0% to 10%			21,951		-		21,951		-
Total			$	448,406	$	273,041	$	175,365	$	-
December 31, 2010:
Equity securities:	62.5% to 72.5%
S&P 500 Stock Index		14.5% to 24.5%	$	83,993	$	83,993	$	-	$	-
Large cap growth		4% to 14%		39,039		-		39,039		-
Large cap value		4% to 14%		38,565		38,565		-		-
Small cap growth		0% to 10%		23,158		23,158		-		-
Small cap value		0% to 10%		21,340		21,340		-		-
International		10% to 30%		80,151		-		80,151		-
Fixed income:	22.5% to 32.5%
Cash and equivalents		0% to 10%		9,627		1		9,626		-
Aggregate fixed income		10% to 16%		54,393		-		54,393		-
Core plus fixed income		7.5% to 17.5%		51,468		51,468		-		-
Real estate	0% to 10%			20,206		-		20,206		-
Total			$	421,940	$	218,525	$	203,415	$	-

Estimated future annual payments for pension and other postretirement benefits

Rowan estimates that the plans will make the following annual payments for pension and other postretirement benefits based upon existing benefit formulas and including amounts attributable to future employee service (in thousands):

	Pension benefits		Other postretirement benefits
Year ended December 31,
2012	$	50,820	$	4,990
2013		39,650		5,300
2014		32,950		5,610
2015		35,270		6,080
2016		36,480		6,570
2017 though 2021		203,190		32,330