Retirement Plans

Pension Plans: The Company currently has two defined benefit pension plans for certain of its employees in the United States. The defined benefit plans provide benefit payments using formulas based on an employee's compensation and length of service, or stated amounts for each year of service. The Company expects to continue to fund these plans based on governmental requirements, amounts deductible for income tax purposes and as needed to ensure that plan assets are sufficient to satisfy plan liabilities. Most of the employee benefits under the Company’s defined benefit plans are frozen.

Supplemental Executive Retirement Plans: The Company has various supplemental executive retirement plans (“SERP”), which provide benefits to certain former directors and executives. For accounting purposes, these plans are unfunded, however, one plan has annuities that cover a portion of the liability to the participants in its plan and the income from the annuities offsets a portion of the cost of the plan. These annuities are included in other assets, net in the consolidated balance sheets.

Other Postretirement Plans: The Company has various other postretirement benefit plans (“OPEB”), primarily focused on postretirement healthcare, such as medical insurance and life insurance and related benefits for certain of its former employees and, in some instances, their spouses. Benefits, eligibility and cost-sharing provisions vary by plan documents or union collective bargaining arrangements.

Savings Plan: The Company sponsors a defined contribution plan to provide substantially all United States salaried and certain hourly employees an opportunity to accumulate personal funds for their retirement. In 2013, the Company contributed $0.3 million to the plan. In 2012, the Company did not make any voluntary contributions. In 2011, the Company matched only certain union employee’s voluntary contributions and contributions required under the collective bargaining agreements. Company contributions to the plan were less than $0.1 million in 2011. Employees participating in the plan held 2,263,670 shares of the Company’s common stock as of the year ended 2013.

Funded Status and Net Periodic Cost: The following table provides a reconciliation of the changes in the Company’s pension, SERP and OPEB plans benefit obligations and fair value of assets for 2013 and 2012, a statement of the funded status as of the years ended 2013 and 2012, respectively, and the amounts recognized in the consolidated balance sheets as of the years ended 2013 and 2012 (in thousands).



	Pensions						SERPs						OPEBs
	2013			2012			2013			2012			2013			2012
Benefit obligation at beginning of year	$	352,009		$	328,523		$	19,603		$	19,538		$	2,479		$	2,551
Service cost	—			1,932			—			—			—			—
Interest cost	12,932			13,657			696			786			88			103
Actuarial (gain) loss	(29,158		)	23,733			(381		)	1,398			(418		)	(24		)
Benefits paid	(16,632		)	(15,836		)	(2,094		)	(2,119		)	(136		)	(151		)
Prior service cost due to acquisition	—			—			—			—			62			—
Benefit obligation at end of year	$	319,151		$	352,009		$	17,824		$	19,603		$	2,075		$	2,479

The following table provides a reconciliation of the Company’s fair value of plan assets:



	Pensions						SERPs						OPEBs
	2013			2012			2013			2012			2013			2012
Fair value of plan assets at beginning of year	$	231,897		$	210,577		$	—		$	—		$	—		$	—
Actual return on plan assets	32,085			21,198			—			—			—			—
Employer contributions	13,567			15,958			2,094			2,119			136			151
Benefits paid	(16,632		)	(15,836		)	(2,094		)	(2,119		)	(136		)	(151		)
Fair value of plan assets at end of year	$	260,917		$	231,897		$	—		$	—		$	—		$	—

The following table shows the funded status at the end of the year:



	Pensions						SERPs						OPEBs
	2013			2012			2013			2012			2013			2012
Funded status at end of year	$	(58,234	)	$	(120,112	)	$	(17,824	)	$	(19,603	)	$	(2,075	)	$	(2,479	)

The following table shows amounts recognized in AOCI:



	Pensions				SERPs				OPEBs
	2013		2012		2013		2012		2013			2012
Net actuarial loss	$	60,338	$	110,682	$	4,158	$	4,766	$	(614	)	$	(200	)
Prior service cost	—		—		—		—		44			(23		)
Total	$	60,338	$	110,682	$	4,158	$	4,766	$	(570	)	$	(223	)

The following table shows amounts recognized in the consolidated balance sheets:



	Pensions				SERPs				OPEBs
	2013		2012		2013		2012		2013		2012
Other current liabilities	$	—	$	—	$	2,077	$	2,135	$	250	$	262
Other liabilities	58,234		120,112		15,747		17,468		1,825		2,217
Total liabilities	$	58,234	$	120,112	$	17,824	$	19,603	$	2,075	$	2,479

The following table provides components of the net periodic cost for the pension, SERP and OPEB plans for the years ended 2013, 2012 and 2011 (in thousands):



	For The Years Ended
	2013			2012			2011
Service cost	$	—		$	1,932		$	1,382
Interest cost	13,716			14,546			15,377
Expected return on plan assets	(18,455		)	(16,875		)	(16,426		)
Net amortization and deferral	(6		)	(6		)	(5		)
Recognized net actuarial loss	7,779			6,424			1,015
Net periodic expense	$	3,034		$	6,021		$	1,343

Interest cost on projected benefit obligation includes $0.8 million, $0.9 million and $1.1 million related to the Company’s SERP and OPEB plans in 2013, 2012 and 2011, respectively.

The pre-tax amount of actuarial losses in AOCI as of the year ended 2013 that are expected to be recognized in net periodic benefit cost in 2014 is $3.0 million for defined benefit pension plans and $0.2 million for other postretirement benefit plans, including SERP. The pre-tax amount of prior service cost included in AOCI as of the year ended 2013 that is expected to be recognized in net periodic benefit cost in 2014 is nil for all defined benefit pension plans.

The assumptions used in computing the net periodic benefit cost were as follows:



	2013		2012		2011
Weighted average discount rate	3.75	%	4.25	%	5.25	%
Expected long-term rate of return on plan assets	8.00	%	8.00	%	8.00	%
Rate of compensation increase	—	%	—	%	3.00	%

The weighted average discount rate used to determine the benefit obligation as of the years ended 2013 and 2012 was 4.50% and 3.75%, respectively.

The discount rate assumption used to determine the Company’s pension obligations as of the years ended 2013 and 2012 takes into account the projected future benefit cash flow and the underlying individual yields in the Citigroup Pension Liability Index that would be available to provide for the payment of those benefits. The ultimate rate is developed by calculating an equivalent discounted present value of the benefit cash flow as of the years ended 2013 and 2012, respectively, using a single discount rate rounded to the nearest quarter percent.

The expected long-term rate of return on plan assets of 8.0% for the years ended 2013 and 2012 was based on historical returns and the expectations for future returns for each asset class in which plan assets are invested as well as the target asset allocation of the investments of the plan assets.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company’s pension plans with accumulated benefit obligations in excess of plan assets were as follows (in thousands):



	2013		2012
Projected benefit obligation	$	336,975	$	371,612
Accumulated benefit obligation	336,975		371,612
Fair value of plan assets	260,917		231,897

The Company currently expects to contribute approximately $15.7 million to its pension plans and approximately $2.4 million to its SERP and OPEB plans in 2014.

The estimated pension benefit payments expected to be paid by the pension plans and the estimated SERP and OPEB payments expected to be paid by the Company for the years 2014 through 2018, and in the aggregate for the years 2019 through 2023, are as follows (in thousands):



	Pension Plans		SERP		OPEB
2014	$	16,966	$	2,123	$	255
2015	17,194		2,041		236
2016	17,477		2,006		217
2017	17,843		1,850		199
2018	18,306		1,681		182
2019 through 2023	97,623		7,133		708

Fair Value of Assets: The Company's investment objective is to maximize the long-term return on its pension plan assets within prudent levels of risk. Investments are primarily diversified with a blend of equity securities, fixed income securities and alternative investments. The intent is to minimize plan expenses by outperforming plan liabilities over the long run.

The Company segregated its plan assets by the following major categories and levels for determining their fair value as of the years ended 2013 and 2012:

Cash and cash equivalents - Carrying value approximates fair value. As such, these assets were classified as Level 1.

Equity - Equity investments are diversified by including United States and non-United States stock, growth stocks, value stocks and stocks of large and small companies. The values of individual equity securities are based on quoted prices in active markets and are classified as Level 1.

Fixed income - Fixed income securities are primarily United States governmental and corporate bonds including mutual funds. The Company invests in certain fixed income funds that were priced on active markets and were classified as Level 1. The Company also invests in certain fixed income securities that are priced based on valuation models rather than a last trade basis and are not exchange-traded and are classified as Level 2.

Other - The Company also invests in group annuity contracts, which are invested in certain fixed income securities and are classified as Level 2.

Alternative investments - Alternative investments are primarily private equity hedge funds and hedge fund-of-funds. The fair value of alternative investments has been estimated using their Net Asset Values (“NAV”) as reported by the investment manager of the respective alternative investment funds. NAV reported by the hedge funds is used as a practical expedient to estimate the fair value. The investment manager values these investments on a periodic basis with models that use market, income and valuation methods. The valuation inputs are not highly observable, and these investments are not actively traded on an open market. These investments were classified as Level 3.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value, or reflective of future fair values. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. The Company invests in various assets in which valuation is determined by NAV. The Company believes that the NAV is representative of fair value, as there are no significant restrictions on redemption on these investments or other reasons that indicate the investment would be redeemed at an amount different than the NAV.

The fair values of the Company’s pension plan assets as of the years ended 2013 and 2012, by asset category are as follows (in thousands):



	2013								2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	6,115	$	—	$	—	$	6,115	$	6,817	$	—	$	—	$	6,817
Equity	141,334		—		—		141,334		121,600		—		—		121,600
Fixed income	17,181		41,487		—		58,668		15,229		40,152		—		55,381
Other	—		1,684		—		1,684		—		1,802		—		1,802
Alternative investments	—		—		53,116		53,116		—		—		46,297		46,297
Total pension plan assets	$	164,630	$	43,171	$	53,116	$	260,917	$	143,646	$	41,954	$	46,297	$	231,897

The following table provides a summary of changes in the fair value of the Company’s Level 3 assets (in thousands):



	Alternative Investments
Balance as of the year ended 2011	$	28,762
Purchases, sales and settlements	14,056
Unrealized gains	3,479
Balance as of the year ended 2012	46,297
Purchases, sales and settlements	—
Unrealized gains	6,819
Balance as of the year ended 2013	$	53,116

The range of asset allocations and the target allocations for the pension plan assets were as follows:



	2013				2012				Target
Equity securities	53	%	65	%	51	%	64	%	60	%	75	%
Fixed income securities	23	%	33	%	25	%	32	%	25	%	35	%
Alternative investments and other	2	%	24	%	4	%	24	%	10	%	30	%

Multi-Employer Plans: Certain of the Company’s employees are included in multi-employer pension plans to which the Company makes contributions in accordance with contractual union agreements. Such contributions are made on a monthly basis in accordance with the requirements of the plans and the actuarial computations and assumptions of the administrators of the plans. Contributions to multi-employer plans were $1.1 million in 2013, $1.1 million in 2012 and $1.6 million in 2011. In 2013, 2012 and 2011, the Company recorded expenses of $0.5 million, $5.1 million, and $1.4 million, respectively, as a result of exiting certain multi-employer pension plans in connection with its cost savings and restructuring plans.

The Company's participation in these plans for the year ended 2013, is outlined in the table below:




Pension Fund	EIN	Pension Plan Number	Pension Protection Act Reported Status (1)		FIP/RP Status (2)	Contributions						Surcharge imposed	Expiration Date of Collective Bargaining Agreement
			2013	2012		2013		2012		2011
						(in thousands)
GCC/IBT National Pension Fund	526118568	001	Red	Red	Implemented	$262		$236		$249		Yes	6/30/2016
GCC/IBT National Pension Fund	526118568	001	Red	Red	Implemented	100		102		206		Yes	12/31/2014
GCC/IBT National Pension Fund	526118568	001	Red	Red	Implemented	14		15		25		Yes	4/30/2014
Graphic Communications Pension Trust Fund Of Canada	M5000050	223	Red	Red	Implemented	195		225		250		No	6/30/2015
Graphic Communications Supplemental Retirement and Disability Fund	M5000050	226, 251	Red	Red	Implemented	429		479		523		No	6/30/2015
CWA/ITU Negotiated Pension Plan	136212879	001	Red	Red	Implemented	88		86		347		No	3/1/2018
				Total contributions		$	1,088	$	1,143	$	1,600

__________________________

(1)

Unless otherwise noted, the most recent Pension Protection Act (“PPA”) zone status available in 2013 and 2012 is for the plan's year end, not the Company's year end. The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded.


(2)	The FIP/RP Status column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.