Pensions And Other Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Pensions And Other Postretirement Benefits [Abstract]

Pensions And Other Postretirement Benefits

Note 6—Pensions and other postretirement benefits:

We sponsor several pension plans and OPEB plans for certain active employees and certain retirees. The benefits under our defined benefit plans are based upon years of service and employee compensation.

Employer Contributions and Plan Benefit Payments

Our funding policy is to contribute annually the minimum amount required under ERISA regulations plus additional amounts as we deem appropriate. We currently do not anticipate being required to fund any contributions to our defined benefit pension plans during 2012. Additionally, we are permitted, but not required, to create supplemental benefits under one of our defined benefit pension plans in lieu of us paying the benefits granted by one of our OPEB plans. We have the ability to decide whether or not to exercise such right on a year-by-year basis. When we do so, our accumulated OPEB benefit obligation is reduced, and our accumulated defined benefit pension obligation is increased by the amount of OPEB benefits that will be paid via supplemental pension benefits as presented in the Funded Status section below.

Benefit payments to plan participants, which reflect expected future service, as appropriate, are expected to be the equivalent of:

	Pension Benefits		Other Benefits
	(In thousands)
2012(1)	$	31,388	$	1,220
2013		28,631		4,026
2014		28,632		3,943
2015		28,607		3,869
2016		28,658		3,791
Next 5 years		142,016		17,646

⁽¹⁾  Pension benefits in 2012 include expected supplemental pension benefits of $2.9 million, created in lieu of the payments that would have been due under one of our OPEB plans, which are excluded from the other benefit payments.

Funded Status

The following tables provide the funded status of our plans and a reconciliation of the changes in our plans' projected benefit obligations and fair value of assets for the years ended December 31, 2010 and 2011:

	Pension Benefits						Other Benefits
	2010			2011			2010			2011
	(In thousands)
Change in projected benefit obligations ("PBO"):
Balance at beginning of the year	$	377,337		$	394,556		$	45,601		$	46,526
Service cost		3,218			3,419			106			118
Interest cost		20,161			19,151			2,489			2,288
Actuarial losses		21,634			64,391			2,561			6,664
Benefits paid		(30,720	)		(30,561	)		(1,305	)		(1,139	)
OPEB benefits extinguished by increased pension benefits		2,926			2,767			(2,926	)		(2,767	)
Balance at end of the year	$	394,556		$	453,723		$	46,526		$	51,690
Change in plan assets:
Fair value at beginning of the year	$	462,143		$	548,518		$	—		$	—
Actual return (loss) on plan assets		117,095			(14,179	)		—			—
Employer contributions		—			—			1,305			1,139
Benefits paid		(30,720	)		(30,561	)		(1,305	)		(1,139	)
Fair value at end of the year	$	548,518		$	503,778		$	—		$	—
Funded status	$	153,962		$	50,055		$	(46,526	)	$	(51,690	)
Amounts recognized in the Consolidated Balance Sheets:
Pension asset	$	153,962		$	71,719		$	—		$	—
Noncurrent accrued pension costs		—			(21,664	)		—			—
Accrued OPEB costs:
Current		—			—			(1,279	)		(1,220	)
Noncurrent		—			—			(45,247	)		(50,470	)
	$	153,962		$	50,055			(46,526	)	$	(51,690	)
Accummulated other comprehensive loss (income):
Prior service cost (credit)		8,897			7,664			(116,505	)		(100,335	)
Actuarial losses		180,073			306,835			85,041			83,741
		188,970			314,499			(31,464	)		(16,594	)
Total	$	342,932		$	364,554		$	(77,990	)	$	(68,284	)
Accumulated benefit obligations ("ABO") of pension plans	$	389,136		$	446,019
Pension plan for which the accumulated benefit obligation exceeds plan assets:
Projected benefit obligation	$	—		$	117,532
Accumulated benefit obligation		—			109,829
Fair value of plan assets		—			95,868

The amounts shown in the table above for unamortized actuarial gains and losses and prior service credits and costs at December 31, 2010 and 2011 have not been recognized as components of our periodic defined benefit cost as of those dates. These amounts will be recognized as components of our periodic defined benefit cost in future years. These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive income (loss) at December 31, 2010 and 2011. We expect approximately $17.8 million and $1.2 million of the unamortized actuarial losses and prior service cost, respectively, will be recognized as components of our periodic defined benefit pension credit in 2012 and that $7.7 million and $16.2 million of the unamortized actuarial losses and prior service credits, respectively, will be recognized as components of our OPEB credit in 2012. The table below details the changes in other comprehensive income (loss) for the years ended December 31, 2009, 2010 and 2011.

	Pension Benefits							Other Benefits
	2009		2010		2011			2009			2010			2011
	(In thousands)
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Plan amendment	$	—	$	—	$	—		$	(76	)	$	—		$	—
Net actuarial gain (loss) arising during the year		33,085		50,808		(134,066	)		(3,138	)		(2,561	)		(6,664	)
Amortization of unrecognized:
Prior service cost (credit)		1,232		1,232		1,232			(16,170	)		(16,170	)		(16,170	)
Net actuarial losses		19,045		15,389		7,306			8,619			8,317			7,965
Total	$	53,362	$	67,429	$	(125,528	)	$	(10,765	)	$	(10,413	)	$	(14,869	)

Net periodic defined benefit cost or credit

The components of our net periodic defined benefit cost or credits are presented in the table below. During 2009, 2010 and 2011, the amounts shown below for the amortization of actuarial gains and losses and prior service credits and costs, net of deferred income taxes, were recognized as components of our accumulated other comprehensive income (loss) at December 31, 2008, 2009 and 2010, respectively.

	Pension Benefits									Other Benefits
	2009			2010			2011			2009			2010			2011
	(In thousands)
Service cost	$	3,080		$	3,218		$	3,419		$	91		$	106		$	118
Interest cost		21,417			20,161			19,151			2,712			2,489			2,288
Expected return on plan assets		(38,887	)		(44,654	)		(55,496	)		—			—			—
Amortization of:
Prior service cost (credit)		1,232			1,232			1,232			(16,170	)		(16,170	)		(16,170	)
Net actuarial losses		19,045			15,389			7,306			8,619			8,317			7,965
Total benefit cost (credit)	$	5,887		$	(4,654	)	$	(24,388	)	$	(4,748	)	$	(5,258	)	$	(5,799	)

Actuarial assumptions

A summary of our key actuarial assumptions used to determine the present value of benefit obligations as of December 31, 2010 and 2011 are shown in the following table:

	Pension Benefits				Other Benefits
	2010		2011		2010		2011
Discount rate		5.0%		4.0%		5.0%		4.0%
Rate of compensation increase		3.6%		3.6%		—		—

A summary of our key actuarial assumptions used to determine the net periodic pension and other retiree benefit credit or expense during 2009, 2010 and 2011 are shown in the following table:

	Pension Benefits						Other Benefits
	2009		2010		2011		2009		2010		2011
Discount rate		6.2%		5.6%		5.1%		6.2%		5.5%		5.0%
Expected return on plan assets		10.0%		10.0%		10.0%		—		—		—
Rate of compensation increase		3.4%		3.6%		3.6%		—		—		—

Variances from actuarially assumed rates will result in increases or decreases in pension assets, accumulated defined benefit obligations, net periodic defined benefit credits or expense and funding requirements in future periods.

At December 31, 2010 and 2011, substantially all of our defined benefit pension plans' assets were invested in the Combined Master Retirement Trust ("CMRT"), a collective investment trust sponsored by Contran to permit the collective investment by certain master trusts that fund certain employee benefit plans sponsored by Contran and certain of its affiliates. The CMRT's long-term investment objective is to provide a rate of return exceeding a composite of broad market equity and fixed income indices (including the S&P 500 and certain Russell indicies) while utilizing both third-party investment managers as well as investments directed by Mr. Simmons. Mr. Simmons is the sole trustee of the CMRT. The trustee of the CMRT, along with the CMRT's investment committee, of which Mr. Simmons is a member, actively manage the investments of the CMRT. The CMRT trustee and investment committee seek to maximize returns in order to meet the CMRT's long-term investment objective. The CMRT trustee and investment committee do not maintain a specific target asset allocation in order to achieve their objectives, but instead they periodically change the asset mix of the CMRT based upon, among other things, advice they receive from third-party advisors and their expectations regarding potential returns for various investment alternatives and what asset mix will generate the greatest overall return. From its inception in 1988 through December 31, 2011, the CMRT has averaged an annual rate of return of 13.9%. For the years ended December 31, 2009, 2010 and 2011, the assumed long-term rate of return for plan assets invested in the CMRT was 10%. In determining the appropriateness of the long-term rate of return assumption, we primarily rely on the historical rates of return achieved by the CMRT, although we consider other factors as well including, among other things, the investment objectives of the CMRT's managers and their expectation that such historical returns will in the future continue to be achieved over the long-term.

The CMRT unit value is determined semi-monthly, and the plans have the ability to redeem all or any portion of their investment in the CMRT at any time based on the most recent semi-monthly valuation. However, the plans do not have the right to individual assets held by the CMRT and the CMRT has the sole discretion in determining how to meet any redemption request. For purposes of our plan asset disclosure, we consider the investment in the CMRT as a Level 2 input because (i) the CMRT value is established semi-monthly and the plans have the right to redeem their investment in the CMRT, in part or in whole, at anytime based on the most recent value and (ii) observable inputs from Level 1 or Level 2 were used to value approximately 83% of the assets of the CMRT at both December 31, 2010 and 2011 as noted below. The aggregate fair value of all of the CMRT assets, including funds of Contran and its other affiliates that also invest in the CMRT, and supplemental asset mix details of the CMRT as of December 31, 2010 and 2011, are as follows:

	December 31,
	2010			2011
	($ in millions)
CMRT asset value	$	712.2		$	666.6
CMRT fair value input:
Level 1		83	%		82	%
Level 2		1			1
Level 3		16			17
		100	%		100	%
CMRT asset mix:
Domestic equities, principally publically traded		73	%		75	%
International equities, publically traded		2			2
Fixed income securities, publically traded		16			14
Privately managed limited partnerships		8			8
Other		1			1
		100	%		100	%

Defined contribution pension plans

We also maintain several defined contribution pension plans. Expense related to these plans was $2.0 million in 2009, $2.2 million in 2010 and $2.5 million in 2011.