Pension Benefits

12 Months Ended

Dec. 31, 2011

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Pension Benefits

Note 8 – Pension Benefits

Pension Plans

The Company has a non-contributory defined benefit pension plan covering substantially all employees who meet age and service requirements (the “Qualified Pension Plan”). The Company also has a supplemental non-contributory pension plan covering certain management employees (the “Nonqualified Pension Plan”).

The Company recognizes the funded status (i.e, the difference between the fair value of plan assets and the projected benefit obligation) of the Company’s pension plan in the accompanying balance sheets as either an asset or a liability and recognizes a corresponding adjustment to accumulated other comprehensive income, net of tax. The projected benefit obligation is the actuarial present value of the benefits earned to date by plan participants based on employee service and compensation including the effect of assumed future salary increases. The accumulated benefit obligation uses the same factors as the projected benefit obligation but excludes the effects of assumed future salary increases. The Company’s measurement date for plan assets and obligations is December 31.

Obligations and Funded Status for Both Pension Plans

	For the Years Ended December 31,
	2011			2010
	(in thousands)
Change in benefit obligations
Projected benefit obligation at beginning of year	$	23,867		$	18,550
Service cost	3,800			3,392
Interest cost	1,184			1,120
Amendments	170			—
Actuarial loss	1,957			2,480
Benefits paid	(1,498		)	(1,675		)
Projected benefit obligation at end of year	$	29,480		$	23,867
Change in plan assets
Fair value of plan assets at beginning of year	$	10,332		$	9,101
Actual return on plan assets	(176		)	1,181
Employer contribution	5,260			1,725
Benefits paid	(1,476		)	(1,675		)
Fair value of plan assets at end of year	$	13,940		$	10,332
Funded status at end of year	$	(15,540	)	$	(13,535	)

The Company’s funded status for the Pension Plans for the years ended December 31, 2011 and 2010, is $15.5 million and $13.5 million, respectively, and is recognized in the accompanying balance sheets as a portion of other noncurrent liabilities. No plan assets of the Qualified Pension Plan were returned to the Company during the fiscal year ended December 31, 2011. There are no plan assets in the Nonqualified Pension Plan. The plan was amended to increase the vesting percent to 40% after attaining two years of service and increasing by 20% per year until fully vested. The impact of this change in the vesting schedule is reflected in amendments in the table above.

Information for Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets for Both Plans

	As of December 31,
	2011		2010
	(in thousands)
Projected benefit obligation	$	29,480	$	23,867
Accumulated benefit obligation	$	21,697	$	17,457
Less: Fair value of plan assets	13,940		10,332
Underfunded accumulated benefit obligation	$	7,757	$	7,125

Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Amortization of unrecognized net gain or loss resulting from experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value) is included as a component of net periodic benefit cost for a year. If, as of the beginning of the year, the unrecognized net gain or loss exceeds ten percent of the greater of the projected benefit obligation and the market-related value of plan assets, the amortization is the excess divided by the average remaining service period of participating employees expected to receive benefits under the plan.

Pre-tax amounts not yet recognized in net periodic pension costs, but rather recognized in accumulated other comprehensive loss as of December 31, 2011, and 2010, consist of:

	As of December 31,
	2011		2010
	(in thousands)
Unrecognized actuarial losses	$	8,501	$	(5,892	)
Unrecognized prior service costs	170		—
Unrecognized transition obligation	—		—
Accumulated other comprehensive loss	$	8,671	$	(5,892	)

The estimated net loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $586,000.

Other pre-tax changes recognized in other comprehensive income during 2011, 2010, and 2009, were as follows:

	As of December 31,
	2011			2010			2009
	(in thousands)
Net actuarial gain (loss)	$	(3,014	)	$	(1,937	)	$	(239	)
Prior service cost	(170		)	—			—
Less: Amortization of:
Actuarial loss	(405		)	(367		)	(358		)
Total other comprehensive income (loss)	$	(2,779	)	$	(1,570	)	$	119

Components of Net Periodic Benefit Cost for Both Pension Plans

	For the Years Ended December 31,
	2011			2010			2009
	(in thousands)
Components of net periodic benefit cost
Service cost	$	3,800		$	3,392		$	2,500
Interest cost	1,184			1,120			934
Expected return on plan assets that reduces periodic pension cost	(880		)	(638		)	(430		)
Amortization of prior service cost	—			—			—
Amortization of net actuarial loss	405			367			372
Net periodic benefit cost	$	4,509		$	4,241		$	3,376

Gains and losses in excess of ten percent of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants.

Pension Plan Assumptions

Weighted-average assumptions to measure the Company’s projected benefit obligation and net periodic benefit cost are as follows:

	As of December 31,
	2011	2010	2009
Projected benefit obligation
Discount rate	4.7%	5.3%	6.1%
Rate of compensation increase	6.2%	6.2%	6.2%
Net periodic benefit cost
Discount rate	5.3%	6.1%	6.1%
Expected return on plan assets	7.5%	7.5%	7.5%
Rate of compensation increase	6.2%	6.2%	6.2%

The Company’s pension investment policy includes various guidelines and procedures designed to ensure that assets are prudently invested in a manner necessary to meet the future benefit obligation of the Pension Plans. The policy does not permit the direct investment of plan assets in the Company’s securities. The Company’s investment horizon is long-term and accordingly the target asset allocations encompass a strategic, long-term perspective of capital markets, expected risk and return behavior and perceived future economic conditions. The key investment principles of diversification, assessment of risk, and targeting the optimal expected returns for given levels of risk are applied.

The Company’s investment portfolio contains a diversified blend of common stocks and bonds, which may reflect varying rates of return. The investments are further diversified within each asset classification. The portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate investment performance. The actual asset allocations are reviewed and rebalanced on a periodic basis to maintain the target allocations. The Company’s weighted-average asset allocation for the Qualified Pension Plan is as follows:

	Target		As of December 31,
Asset Category	2012		2011		2010
Equity securities	60.0	%	61.8	%	60.8	%
Debt securities	40.0	%	37.7	%	39.2	%
Other	—	%	0.5	%	—	%
Total	100.0	%	100.0	%	100.0	%

There is no asset allocation of the Nonqualified Pension Plan since there are no plan assets in that plan. An expected return on plan assets of 7.5 percent was used to calculate the Company’s obligation under the Qualified Pension Plan for 2011 and 2010. Factors considered in determining the expected return include the 60 percent equity and 40 percent debt securities mix of investment of plan assets and the long-term historical rate of return provided by the equity and debt securities markets. The difference in investment income using the projected rate of return compared to the actual rates of return for the past two years was not material and will not have a material effect on the accompanying statements of operations or cash flows from operating activities in future years.

Fair Value Assumptions

The Company’s pension plan assets consist of funds that have quoted net asset values within active markets. The individual funds are derived from quoted equity and debt securities within active markets with no judgment involved. As such, the funds are deemed to be Level 1. The fair value of the Company’s pension plan assets as of December 31, 2011, utilizing the fair value hierarchy discussed in Note 11 – Fair Value Measurements is as follows:

Assets:	Level 1		Level 2	Level 3
	(in thousands)
Cash and Money Market Funds	$	66	—	—
Equity Securities
Foreign Large Blend (1)	2,048		—	—
U.S. Small Blend (2)	2,290		—	—
U.S. Large Blend (3)	4,278		—	—
Fixed Income Securities
Intermediate Term Bond (4)	5,258		—	—
Total	$	13,940	—	—

(1) International equities are invested in companies that trade on active exchanges outside the U.S. and are well diversified among a dozen or more developed markets. Active and passive strategies are employed.

(2) U.S. equities are invested in companies that are well diversified by industry sector and equity style, such as growth and value strategies, that trade on active exchanges within the U.S. Active and passive management strategies are employed. At least 80% of this fund is invested in equity securities of small companies.

(3) U.S. equities include companies that are well diversified by industry sector and equity style, such as growth and value strategies, that trade on active exchanges within the U.S. Active and passive management strategies are employed. At least 80% of this fund is invested in equity securities designed to replicate the holdings and weightings of the stocks listed in the S&P 500 index.

(4) Intermediate term bonds seek total return. At least 80% of this fund is invested in a diversified portfolio of bonds, which include all types of securities. It invests primarily in bonds of corporate and governmental issues located in the U.S. and foreign countries, including emerging markets all of which trade on active exchanges.

The fair value of the Company’s pension plan assets as of December 31, 2010, is as follows (see footnotes above):

Assets:	Level 1		Level 2		Level 3
	(in thousands)
Cash and Money Market Funds	$	4	$	—	$	—
Equity Securities
Foreign Large Blend (1)	1,444		—		—
U.S. Small Blend (2)	1,647		—		—
U.S. Large Blend (3)	3,185		—		—
Fixed Income Securities
Intermediate Term Bond (4)	4,052		—		—
Total	$	10,332	$	—	$	—

Contributions

The Company contributed $5.3 million, $1.7 million, and $2.0 million, to the Pension Plans in the years ended December 31, 2011, 2010, and 2009, respectively. The Company is expected to make a $4.9 million contribution to the Pension Plans in 2012.

Benefit Payments

The Pension Plans made actual benefit payments of $1.5 million, $1.7 million, and $945,000 in the years ended December 31, 2011, 2010, and 2009, respectively. Expected benefit payments over the next ten years are as follows (in thousands):

Years Ending December 31,
2012	$	1,296
2013	2,360
2014	2,513
2015	2,205
2016	2,668
2017 through 2021	$	23,258