BENEFIT PLANS

Qualified Pension Benefits Plans that cover salaried employees provide pension benefits based on the employee’s compensation during the ten years before retirement. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. During the fourth quarter of 2012, $62,754 of pension plan assets were distributed to certain deferred terminated vested participants to settle certain salary plan liabilities which resulted in $21,907 of additional pension expense recognized in selling and administrative expense within the Company's statement of operations. Plans covering hourly employees and union members generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions required by applicable regulations. Employees of the Company’s operations in countries outside of the United States participate to varying degrees in local pension plans, which in the aggregate are not significant.

Supplemental Executive Retirement Benefits The Company has non-qualified pension plans to provide supplemental retirement benefits to certain officers. Benefits are payable at retirement based upon a percentage of the participant’s compensation, as defined.

Other Benefits In addition to providing pension benefits, the Company provides postretirement healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Eligible employees may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. Currently, the Company has made no commitments to increase these benefits for existing retirees or for employees who may become eligible for these benefits in the future. Currently there are no plan assets and the Company funds the benefits as the claims are paid. The postretirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates.

The following tables set forth the change in benefit obligation, change in plan assets, funded status, consolidated balance sheet presentation and net periodic benefit cost for the Company’s defined benefit pension plans and other benefits at and for the years ended December 31:



	Pension Benefits						Other Benefits
	2012			2011			2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	636,210		$	552,760		$	17,022		$	16,885
Service cost	11,446			10,854			—			—
Interest cost	31,831			31,491			814			930
Actuarial loss (gain)	96,016			63,079			(414		)	1,277
Plan participant contributions	—			—			79			114
Medicare retiree drug subsidy reimbursements	—			—			166			177
Benefits paid	(23,909		)	(21,932		)	(1,940		)	(2,361		)
Settlements	(77,910		)	—			—			—
Other	27			(42		)	—			—
Benefit obligation at end of year	$	673,711		$	636,210		$	15,727		$	17,022

Change in plan assets
Fair value of plan assets at beginning of year	$	485,489		$	450,632		$	—		$	—
Actual return on plan assets	58,560			33,471			—			—
Employer contributions	15,711			23,318			1,861			2,247
Plan participant contributions	—			—			79			114
Benefits paid	(23,909		)	(21,932		)	(1,940		)	(2,361		)
Settlements	(62,754		)	—			—			—
Fair value of plan assets at end of year	$	473,097		$	485,489		$	—		$	—

Funded status	$	(200,614	)	$	(150,721	)	$	(15,727	)	$	(17,022	)

Amounts recognized in balance sheets
Current liabilities	$	2,931		$	2,846		$	1,574		$	1,693
Noncurrent liabilities (1)	197,683			147,875			14,153			15,329
Accumulated other comprehensive loss:
Unrecognized net actuarial loss (2)	(238,144		)	(213,712		)	(4,982		)	(5,884		)
Unrecognized prior service cost (benefit) (2)	(1,679		)	(1,935		)	933			1,450
Net amount recognized	$	(39,209	)	$	(64,926	)	$	11,678		$	12,588

Change in accumulated other comprehensive loss
Balance at beginning of year	$	(215,647	)	$	(155,050	)	$	(4,434	)	$	(3,029	)
Prior service cost (credit) recognized during the year	258			259			(517		)	(517		)
Net actuarial losses recognized during the year	16,777			9,497			488			389
Net actuarial (losses) gains occurring during the year	(63,118		)	(70,353		)	414			(1,277		)
Settlements	21,907			—			—			—
Balance at end of year	$	(239,823	)	$	(215,647	)	$	(4,049	)	$	(4,434	)


(1)	Included in the consolidated balance sheets in pensions and other benefits and other postretirement benefits are international plans.


(2)	Represents amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost.



	Pension Benefits									Other Benefits
	2012			2011			2010			2012			2011			2010
Components of net periodic benefit cost
Service cost	$	11,446		$	10,854		$	9,994		$	—		$	—		$	—
Interest cost	31,831			31,491			30,723			814			930			993
Expected return on plan assets	(40,821		)	(40,735		)	(38,412		)	—			—			—
Amortization of prior service cost (1)	258			259			197			(517		)	(517		)	(517		)
Recognized net actuarial loss	16,777			9,497			5,688			488			389			284
Settlement loss	21,907			—			—			—			—			—
Net periodic pension benefit cost	$	41,398		$	11,366		$	8,190		$	785		$	802		$	760


(1)	The annual amortization of prior service cost is determined as the increase in projected benefit obligation due to the plan change divided by the average remaining service period of participating employees expected to receive benefits under the plan.

The following table represents information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31:



	2012		2011
Projected benefit obligation	$	673,711	$	636,210
Accumulated benefit obligation	605,424		580,200
Fair value of plan assets	473,097		485,489

The following table represents the weighted-average assumptions used to determine benefit obligations at December 31:



	Pension Benefits				Other Benefits
	2012		2011		2012		2011
Discount rate	4.21	%	5.04	%	4.21	%	5.04	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A

The following table represents the weighted-average assumptions used to determine periodic benefit cost at December 31:



	Pension Benefits				Other Benefits
	2012		2011		2012		2011
Discount rate	5.04	%	5.83	%	5.04	%	5.83	%
Expected long-term return on plan assets	8.25	%	8.50	%	N/A		N/A
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A

The discount rate is determined by analyzing the average return of high-quality (i.e., AA-rated) fixed-income investments and the year-over-year comparison of certain widely used benchmark indices as of the measurement date. The expected long-term rate of return on plan assets is primarily determined using the plan’s current asset allocation and its expected rates of return based on a geometric averaging over 20 years. The Company also considers information provided by its investment consultant, a survey of other companies using a December 31 measurement date and the Company’s historical asset performance in determining the expected long-term rate of return. The rate of compensation increase assumptions reflects the Company’s long-term actual experience and future and near-term outlook.

The following table represents assumed health care cost trend rates at December 31:



	2012		2011
Healthcare cost trend rate assumed for next year	8.0	%	8.0	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.2	%	4.2	%
Year that rate reaches ultimate trend rate	2099		2099

The healthcare trend rates are reviewed based upon the results of actual claims experience. The Company used healthcare cost trends of 8.0 percent and 8.0 percent in 2013 and 2012, respectively, decreasing to an ultimate trend of 4.2 percent in 2099 for both medical and prescription drug benefits using the Society of Actuaries Long Term Trend Model with assumptions based on the 2008 Medicare Trustees’ projections. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans.

A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:



	One-Percentage-Point Increase		One-Percentage-Point Decrease
Effect on total of service and interest cost	$	51	$	(46	)
Effect on postretirement benefit obligation	911		(825		)

The Company has a pension investment policy designed to achieve an adequate funded status based on expected benefit payouts and to establish an asset allocation that will meet or exceed the return assumption while maintaining a prudent level of risk. The plans' target asset allocation adjusts based on the plan's funded status. As the funded status improves or declines, the debt security target allocation will increase and decrease, respectively. The Company utilizes the services of an outside consultant in performing asset / liability modeling, setting appropriate asset allocation targets along with selecting and monitoring professional investment managers.

The plan assets are invested in equity and fixed income securities, alternative assets and cash. Within the equities asset class, the investment policy provides for investments in a broad range of publicly-traded securities including both domestic and international stocks diversified by value, growth and cap size. Within the fixed income asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities with a substantial portion allocated to a long duration strategy in order to partially offset interest rate risk relative to the plans’ liabilities. The alternative asset class includes investments in diversified strategies with a stable and proven track record and low correlation to the U.S. stock market.

The following table summarizes the Company’s target mix for these asset classes in 2013, which are readjusted at least quarterly within a defined range, and the Company’s actual pension plan asset allocation as of December 31, 2012 and 2011:



	Target Allocation Percentage	Actual Allocation Percentage
	2013	2012	2011
Equity securities	45%	44%	35%
Debt securities	40%	39%	51%
Real estate	5%	5%	4%
Other	10%	12%	10%
Total	100%	100%	100%

Assets are categorized into a three level hierarchy based upon the assumptions (inputs) used to determine the fair value the assets (refer to note 18).

Level 1 - Fair value of investments categorized as level 1 are determined based on period end closing prices in active markets. Mutual funds are valued at their net asset value (NAV) on the last day of the period.

Level 2 - Fair value of investments categorized as level 2 are determined based on the latest available ask price or latest trade price if listed. The fair value of unlisted securities is established by fund managers using the latest reported information for comparable securities and financial analysis. If the manager believes the fund is not capable of immediately realizing the fair value otherwise determined, the manager has the discretion to determine an appropriate value. Common collective trusts are valued at NAV on the last day of the period.

Level 3 - Fair value of investments categorized as level 3 represent the plan’s interest in private equity, hedge and property funds. The fair value for these assets is determined based on the NAV as reported by the underlying investment managers.

The following table summarizes the fair value of the Company’s plan assets as of December 31, 2012:



	Fair Value		Level 1		Level 2		Level 3
Cash and other	$	2,940	$	2,940	$	—	$	—
Mutual funds:
U.S. mid growth	18,898		18,898		—		—
Equity securities:
U.S. mid cap value	17,106		17,106		—		—
U.S. small cap core	22,142		22,142		—		—
International developed markets	47,900		47,900		—		—
Fixed income securities:
U.S. corporate bonds	64,835		—		64,835		—
International corporate bonds	1,873		—		1,873		—
U.S. government	2,010		—		2,010		—
Other fixed income	624		—		624		—
Emerging markets	23,292		—		23,292		—
Common collective trusts:
Real estate (a)	25,162		—		—		25,162
Other (b)	194,594		—		194,594		—
Alternative investments:
Multi-strategy hedge funds (c)	28,377		—		—		28,377
Private equity funds (d)	23,344		—		—		23,344
	$	473,097	$	108,986	$	287,228	$	76,883

The following table summarizes the fair value of the Company’s plan assets as of December 31, 2011:



	Fair Value		Level 1		Level 2		Level 3
Cash and other	$	50,389	$	50,389	$	—	$	—
Mutual funds:
U.S. mid growth	15,771		15,771		—		—
Equity securities:
U.S. mid cap value	14,672		14,672		—		—
U.S. small cap core	17,253		17,253		—		—
International developed markets	37,345		37,345		—		—
Fixed income securities:
U.S. corporate bonds	68,356		—		68,356		—
International corporate bonds	2,316		—		2,316		—
U.S. government	3,436		—		3,436		—
Other fixed income	598		—		598		—
Emerging markets	17,334		—		17,334		—
Common collective trusts:
Real estate (a)	16,443		—		—		16,443
Other (b)	191,421		—		191,421		—
Alternative investments:
Multi-strategy hedge funds (c)	26,605		—		—		26,605
Private equity funds (d)	23,550		—		—		23,550
Total	$	485,489	$	135,430	$	283,461	$	66,598

(a)

Real estate common collective trust The objective of the real estate common collective trust (CCT) is to achieve long-term returns through investments in a broadly diversified portfolio of improved properties with stabilized occupancies. As of December 31, 2012, investments in this CCT include approximately 43 percent office, 21 percent residential, 19 percent industrial, cash and other and 17 percent retail. As of December 31, 2011 investments in this CCT include approximately 46 percent office, 23 percent residential, 19 percent retail and 12 percent industrial, cash and other. Investments in the real estate CCT can be redeemed once per quarter subject to available cash, with a 45-day notice.

(b)

Other common collective trusts At December 31, 2012, approximately 60 percent of the other CCTs are invested in fixed income securities including approximately 27 percent in mortgage-backed securities, 42 percent in corporate bonds and 31 percent in U.S. Treasury and other. Approximately 40 percent of the other CCTs at December 31, 2012 are invested in Russell 1000 Fund large cap index funds. At December 31, 2011, approximately 64 percent of the other CCTs are invested in fixed-income securities including approximately 35 percent in mortgage-backed securities, 45 percent in corporate bonds and 20 percent in U.S. Treasury and other. Approximately 36 percent of the other CCTs at December 31, 2011 are invested in Russell 1000 Fund large cap index funds. Investments in fixed-income securities can be redeemed daily.

(c)

Multi-strategy hedge funds The objective of the multi-strategy hedge funds is to diversify risks and reduce volatility. At December 31, 2012 and 2011, investments in this class include approximately 35 percent long/short equity in both periods, 40 percent and 35 percent, respectively, arbitrage and event investments and 25 percent and 30 percent, respectively, in directional trading, fixed income and other. Investments in the multi-strategy hedge fund can be redeemed semi-annually with a 95-day notice.

(d)

Private equity funds The objective of the private equity funds is to achieve long-term returns through investments in a diversified portfolio of private equity limited partnerships that offer a variety of investment strategies, targeting low volatility and low correlation to traditional asset classes. As of December 31, 2012 and 2011, investments in these private equity funds include approximately 50 percent in both years, in buyout private equity funds that usually invest in mature companies with established business plans, 25 percent and 30 percent, respectively, in special situations private equity and debt funds that focus on niche investment strategies and 25 percent and 20 percent, respectively, in venture private equity funds that invest in early development or expansion of business. Investments in the private equity fund can be redeemed only with written consent from the general partner, which may or may not be granted. At December 31, 2012 and 2011, the Company had unfunded commitments of underlying funds of $5,529 and $5,618.

The following table summarizes the changes in fair value of level 3 assets for the years ended December 31:



	2012			2011
Balance, January 1	$	66,598		$	56,775
Acquisitions	6,088			5,394
Dispositions	(2,479		)	(1,536		)
Realized gain, net	3,432			537
Unrealized gain, net	3,244			5,428
Balance, December 31	$	76,883		$	66,598

The following table represents the amortization amounts expected to be recognized during 2013:



	Pension Benefits		Other Benefits
Amount of net prior service cost (credit)	$	258	$	(488	)
Amount of net loss	21,377		422

The Company contributed $15,711 to its pension plans, including contributions to the nonqualified plan, and $1,861 to its other postretirement benefit plan during the year ended December 31, 2012. Also, the Company expects to contribute $3,343 to its pension plans, including the nonqualified plan, and $1,798 to its other postretirement benefit plan during the year ending December 31, 2013. The following benefit payments, which reflect expected future service, are expected to be paid:



	Pension Benefits		Other Benefits before Medicare Part D Subsidy		Other Benefits after Medicare Part D Subsidy
2013	$	24,741	$	1,798	$	1,607
2014	27,556		1,771		1,585
2015	28,051		1,716		1,532
2016	29,662		1,660		1,484
2017	31,147		1,600		1,432
2018-2022	183,750		6,773		6,076

Retirement Savings Plan The Company offers employee 401(k) savings plans (Savings Plans) to encourage eligible employees to save on a regular basis by payroll deductions. Effective July 1, 2003, a new enhanced benefit to the Savings Plans became effective. This enhanced benefit is in lieu of participation in the pension plan for salaried employees. The following table represents the Company's basic match percentage on participant qualified contributions up to a percentage of their compensation:



	Employees hired prior to July 1, 2003	Employees hired on or after July 1, 2003
Effective April 1, 2009 - December 31, 2010	None	30% of first 6%
Effective January 1, 2011 - December 31, 2011	25% of first 6%	55% of first 6%
Effective January 1, 2012 - December 31, 2012	30% of first 6%	60% of first 6%

The Company match is determined by the Board of Directors and evaluated at least annually. Total Company match was $8,357, $6,483 and $1,895 for the years ended December 31, 2012, 2011 and 2010, respectively.

Deferred Compensation Plans The Company has deferred compensation plans that enable certain employees to defer receipt of a portion of their cash bonus or share-based compensation and non-employee directors to defer receipt of director fees at the participants’ discretion. For deferred cash-based compensation, the Company established a rabbi trust which is recorded at fair value of the underlying securities within securities and other investments. The related deferred compensation liability is recorded at fair value within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trust are recognized in investment income with corresponding changes in the Company’s deferred compensation obligation recorded as compensation cost within selling and administrative expense.