Pension and Postretirement Benefits other than Pensions:

The Company has defined benefit pension plans covering a significant number of its employees. The benefits under these plans are based primarily on years of service and compensation levels. The Company also provides health benefits for certain retired employees and certain dependents when the employee becomes eligible for these benefits by satisfying plan provisions that include certain age and service requirements. The measurements for the pension and health benefit plans were performed at December 31.

Pension Benefits

Pension expense for 2012, 2011, and 2010 for these defined benefit plans consists of the following components:



	Years Ended December 31,
	2012			2011			2010
Service cost	$	4,179		$	3,909		$	3,807
Interest cost	12,547			13,081			13,291
Expected return on plan assets	(12,077		)	(12,886		)	(11,643		)
Amortization of prior service cost	(264		)	(287		)	(354		)
Amortization of net loss	5,486			3,943			3,878
Settlement	—			—			1,541
Correction of error	—			—			(2,909		)
Net periodic pension expense	9,871			7,760			7,611

Adjustments included in other comprehensive (income) loss:
Net actuarial losses	16,382			24,713			4,865
Amortization of actuarial losses	(5,486		)	(3,943		)	(3,878		)
Amortization of prior service cost	264			287			354
Settlement / curtailment	—			—			(1,541		)
Correction of error	—			—			2,909
Total loss recognized in other comprehensive (income) loss	11,160			21,057			2,709
Total recognized in comprehensive (income) loss	$	21,031		$	28,817		$	10,320

In 2010 a former executive of the Company received a lump sum distribution which resulted in settlement expense of $1,541.

In 2010 the Company changed its method of recognizing pension expense for its U.S. defined benefit pension plans. Previously a market-related value of plan assets which reflected the changes in fair value of plan assets over a five-year period was used to calculate the expected return on plan assets, a component of net periodic pension expense. In 2010 a change was made to use the fair value of plan assets to calculate the expected return on plan assets, which is consistent with how the non-U.S. plans recognize pension expense. $2,909 of income was recognized in 2010 as a result of this change. The Company made the correction for this item in 2010 as the error was determined to be immaterial to the overall financial statements in 2010 and in all previous years.

The Company expects to incur income of $299 related to the amortization of prior service costs and expense of $5,236 for amortization of net loss in 2013.

The weighted average assumptions used to determine net periodic pension expense are as follows:



	Years Ended December 31,
	2012		2011		2010
Discount rate	4.6	%	5.3	%	5.8	%
Rate of compensation increase	3.5	%	3.6	%	3.5	%
Expected long-term rate of return on plan assets	6.0	%	7.0	%	7.2	%

The discount rate reflects the current rate at which the associated liabilities could be effectively settled. The Company sets its rate to reflect the yield of a portfolio of high-quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. The rate of compensation increase assumption reflects the Company's past actual experience, the near-term outlook and assumed inflation. The expected long-term rate of return on plan assets reflects asset allocations, investment strategy, and the views of investment managers and other large pension plan sponsors.

The following table sets forth the plans' funded status as of the respective balance sheet dates:



	December 31,
	2012			2011
Reconciliation of benefit obligation:
Benefit obligation at January 1	$	(274,802	)	$	(247,380	)
Service cost	(4,179		)	(3,909		)
Interest cost	(12,547		)	(13,081		)
Plan participant contributions	(1,441		)	(1,141		)
Actuarial loss	(29,725		)	(22,147		)
Benefit payments	11,527			11,489
Effect of exchange rate changes	(4,446		)	1,367
Benefit obligation at December 31	(315,613		)	(274,802		)
Reconciliation of fair value of plan assets:
Fair value of plan assets at January 1	197,878			182,781
Actual return on plan assets	25,420			10,320
Employer contributions	11,535			13,829
Plan participant contributions	1,441			1,141
Benefit payments	(9,626		)	(9,496		)
Effect of exchange rate changes	3,817			(697		)
Fair value of plan assets at December 31	230,465			197,878
Funded status at December 31	(85,148		)	(76,924		)
Net amount recognized	$	(85,148	)	$	(76,924	)

The weighted average assumptions used to determine the benefit obligation are as follows:



	December 31,
	2012		2011
Discount rate	3.8	%	4.6	%
Rate of compensation increase	3.5	%	3.5	%

Amounts recognized in the consolidated balance sheets as of:



	December 31,
	2012			2011
Long-term pension asset	$	3,737		$	2,847
Current pension liability	(106		)	(54		)
Long-term pension liability	(88,779		)	(79,717		)
Net amount recognized	$	(85,148	)	$	(76,924	)

The total accumulated benefit obligation for all pension plans at December 31, 2012 and 2011 was $302,587 and $260,130, respectively.

The aggregate projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with projected and accumulated benefit obligations in excess of plan assets as of December 31, 2012 and 2011 were as follows:



	Projected and Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets
	U.S. Plans				Non-U.S. Plans
	December 31,				December 31,
	2012		2011		2012		2011
Projected benefit obligation	$	191,912	$	168,644	$	66,464	$	53,597
Accumulated benefit obligation	181,245		158,955		62,760		51,720
Fair value of plan assets	137,192		117,003		32,220		25,468

Amounts recorded in accumulated other comprehensive income as of:



	December 31,
	2012			2011
Actuarial loss	$	98,492		$	86,587
Prior service cost	(2,217		)	(2,432		)
	$	96,275		$	84,155

These amounts have not yet been recognized as components of net periodic pension expense.

Plan Assets

The target asset allocation for the U.S. pension assets, on average, is 60 percent in equity securities and 40 percent in fixed income securities. This allocation is expected to earn an average annual rate of return of approximately 7 percent measured over a planning horizon of twenty years with reasonable and acceptable levels of risk. This expected level will be obtained, with an allowance for expenses, and cash investments, if equity securities realize an average annual return of 10 percent and fixed income securities produce an average annual yield of 5 percent.

The target asset allocation for the U.K. pension assets, on average, is 32 percent in equity securities, 67 percent in fixed income securities, and 1 percent in cash. This allocation is expected to earn an average annual rate of return of approximately 4.9 percent.

The target asset allocation for the German pension assets is 15 percent in equity securities and 85 percent in fixed income securities. This allocation is expected to earn an average annual rate of return of approximately 3.5 percent measured over a long-term planning horizon. This expected level will be obtained, with an allowance for expenses, and cash investments, if equity securities realize an average annual return of 7 to 8 percent and fixed income securities produce an average annual yield of 2.5 to 3 percent.

The weighted average asset allocations by asset category for the pension plans at December 31 are as follows:



	U.S. Plans				U.K. Plans				German Plans
	2012		2011		2012		2011		2012		2011
Equity securities	62	%	62	%	32	%	42	%	14	%	9	%
Fixed income securities	37		37		67		57		80		85
Other	1		1		1		1		6		6
Total	100	%	100	%	100	%	100	%	100	%	100	%

The following tables present the Company's plan assets using the fair value hierarchy as of December 31, 2012 and December 31, 2011. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs.



December 31, 2012	Level 1			Level 2		Level 3		Total
Fixed income securities
Corporate bonds	$	23,166		$	—	$	—	$	23,166
International index-linked government securities	42,040			—		—		42,040
Fixed income funds	—			50,264		—		50,264
Cash equivalents and short-term investments	3,049			—		—		3,049
Equity securities
Common and preferred stock	4,152			—		—		4,152
Common/collective/pooled funds	—			51,295		—		51,295
Derivatives	(15		)	—		—		(15		)
International equity	55,936			—		—		55,936
Total	$	128,328		$	101,559	$	—	$	229,887
Receivables								599
Payables								(21		)
Total plan assets								$	230,465



December 31, 2011	Level 1			Level 2		Level 3		Total
Fixed income securities
Corporate bonds	$	17,104		$	—	$	—	$	17,104
International index-linked government securities	35,038			—		—		35,038
Fixed income funds	—			43,275		—		43,275
Cash equivalents and short-term investments	2,381			—		—		2,381
Equity securities
Common and preferred stock	2,530			—		—		2,530
Common/collective/pooled funds	—			49,187		—		49,187
Derivatives	(155		)	—		—		(155		)
International equity	48,021			—		—		48,021
Total	$	104,919		$	92,462	$	—	$	197,381
Receivables								517
Payables								(20		)
Total plan assets								$	197,878

Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades.

Cash equivalents and short-term investments are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments.

Common and preferred stock equity securities and international equity securities are valued using a market approach based on quoted market prices. Common/collective/pooled funds are common or collective trusts valued at their net asset values that are calculated by the investment manager or fund sponsor based on the quoted market prices of the underlying investments.

Postretirement Benefits

The Company has contributory health benefit plans covering certain groups of U.S. employees. U.S. employees retiring after March 1, 1993, and hired prior to January 1, 1993, will receive the standard health benefits up to age 65 and then will be eligible to receive a health care reimbursement account based on years of service. U.S. employees hired after January 1, 1993, and retiring after age 65 with ten years of service, will be eligible at age 65 to receive a health care reimbursement account based on years of service.

These plans contain other cost-sharing features such as deductibles and coinsurance. The Company does not pre-fund these plans and has the right to modify or terminate any of these plans in the future. Health benefits for retirees of non-U.S. operations, where applicable, are provided through government-sponsored plans to which the Company contributes funds during the individuals' employment periods.

The components of the postretirement benefit expense of the Company-sponsored health benefit plans for 2012, 2011, and 2010, were as follows:



	Years Ended December 31,
	2012			2011			2010
Service cost	$	188		$	192		$	172
Interest cost	1,267			2,658			2,865
Amortization of prior service cost	(1,530		)	(128		)	(128		)
Amortization of net loss	1,806			1,855			1,676
Postretirement benefit expense	1,731			4,577			4,585

Adjustments included in other comprehensive (income) loss:
Net actuarial losses	2,397			1,797			9,582
Amortization of actuarial losses	(1,806		)	(1,855		)	(1,676		)
Amortization of prior service credit	1,530			128			128
Plan amendment	—			(19,543		)	—
Total (gain) loss recognized in other comprehensive (income) loss	2,121			(19,473		)	8,034
Total recognized in comprehensive (income) loss	$	3,852		$	(14,896	)	$	12,619

In 2011, the Company amended its postretirement health care plan for certain Medicare eligible retirees to a defined contribution approach, with the amendment to be effective on January 1, 2012. Prior to the amendment, the Company provided postretirement health care to these same Medicare eligible retirees by allowing them to continue participation in the Company's existing group health care plan, on a secondary basis to Medicare.

The Company expects to incur income of $1,531 for amortization of prior service costs and expense of $2,081 for amortization of net loss in 2013.

The funded status of the Company-sponsored health benefit plans as of:



	December 31,
	2012			2011
Reconciliation of benefit obligation:
Benefit obligation at January 1	$	(34,839	)	$	(52,959	)
Service cost	(188		)	(192		)
Interest cost	(1,267		)	(2,658		)
Plan participant contributions	(248		)	(471		)
Plan amendment	—			19,543
Actuarial loss	(2,397		)	(1,797		)
Benefit payments	3,209			3,805
Health care subsidy receipts	(142		)	(110		)
Benefit obligation at December 31	(35,872		)	(34,839		)
Reconciliation of fair value of plan assets:
Fair value of plan assets at January 1	—			—
Employer contributions	2,819			3,224
Plan participant contributions	248			471
Health care subsidy receipts	142			110
Benefit payments	(3,209		)	(3,805		)
Fair value of plan assets at December 31	—			—
Benefit obligation	(35,872		)	(34,839		)
Less current portion	3,190			3,351
Postretirement benefit obligation, long-term	$	(32,682	)	$	(31,488	)

Amounts recognized in accumulated other comprehensive income as of:



	December 31,
	2012			2011
Actuarial loss	$	32,870		$	32,279
Prior service credit	(19,838		)	(21,368		)
	$	13,032		$	10,911

The assumed weighted average rate of increase in the per capita cost of covered health benefits used to determine the accumulated postretirement benefit obligation at December 31, 2012 was 7.4%, gradually decreasing to 4.5% through 2027 and for all future years.

A 1 percent increase in the assumed health care trend rates would have increased the accumulated postretirement benefit obligation at December 31, 2012 by $977, and increased postretirement benefit expense for 2012 by $38. A 1 percent decrease in the assumed health care trend rates would have decreased the accumulated postretirement benefit obligation at December 31, 2012 by $908, and decreased postretirement benefit expense for 2012 by $35.

The weighted average discount rate used to estimate the accumulated postretirement benefit obligation was 3.2%, 4.2%, and 5.3% for 2012, 2011, and 2010, respectively.

The benefits expected to be paid from the benefit plans, which reflect expected future years of service are as follows:



	Pensions		Health Care
2013	$	11,701	$	3,190
2014	12,219		3,232
2015	13,172		3,235
2016	13,817		3,220
2017	14,316		3,072
2018-2022	81,064		12,157

The Company plans to contribute $14,890 to the Company pension and health benefit plans in 2013.

The Company also maintains defined contribution plans for eligible employees. Company contributions include both base and matching amounts. The Company contributed approximately $3,900, $3,300, and $3,000 to this plan in 2012, 2011 and 2010, respectively.