|
Postretirement Benefits (Tables)
|
12 Months Ended |
|
Dec. 31, 2011
|
| Postretirement Benefits [Abstract] |
|
| Schedule of Net Pension and Other Benefit Costs |
Pension and other postretirement benefit costs included the following components for 2011, 2010 and 2009:
| |
|
|
|
|
Other Postretirement |
|
| |
|
Pension Benefits |
|
|
Benefits |
|
(in millions) |
|
2011 |
|
|
2010 |
|
|
2009 |
|
|
2011 |
|
|
2010 |
|
|
2009 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
1.1 |
|
|
$ |
1.1 |
|
|
$ |
9.2 |
|
|
$ |
0.2 |
|
|
$ |
0.4 |
|
|
$ |
1.1 |
|
Interest cost |
|
|
62.4 |
|
|
|
64.8 |
|
|
|
66.4 |
|
|
|
3.2 |
|
|
|
3.9 |
|
|
|
4.9 |
|
Expected return on plan assets |
|
|
(53.3 |
) |
|
|
(49.5 |
) |
|
|
(49.4 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Amortization of prior service costs (credits) |
|
|
0.4 |
|
|
|
0.4 |
|
|
|
3.6 |
|
|
|
(5.2 |
) |
|
|
(3.9 |
) |
|
|
(2.4 |
) |
Amortization of net actuarial loss |
|
|
21.3 |
|
|
|
22.2 |
|
|
|
52.5 |
|
|
|
1.0 |
|
|
|
- |
|
|
|
- |
|
Curtailment loss |
|
|
0.3 |
|
|
|
0.1 |
|
|
|
12.4 |
|
|
|
- |
|
|
|
- |
|
|
|
0.7 |
|
Settlement loss |
|
|
- |
|
|
|
- |
|
|
|
1.5 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net pension and other benefit costs |
|
$ |
32.2 |
|
|
$ |
39.1 |
|
|
$ |
96.2 |
|
|
$ |
(0.8 |
) |
|
$ |
0.4 |
|
|
$ |
4.3 |
|
|
| Reconciliation of the Changes in Plans Benefit Obligations, Fair Value of Plan Assets, and Statement of Funded Status |
A reconciliation of the changes in the benefit obligations and fair value of assets over the two-year period ending December 31, 2011, and a statement of the funded status at December 31 for these years for the Company's pension and other postretirement benefit plans follow:
| |
|
|
|
|
Other |
|
| |
|
|
|
|
Postretirement |
|
| |
|
Pension Benefits |
|
|
Benefits |
|
(in millions) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at previous December 31 |
|
$ |
1,214.2 |
|
|
$ |
1,143.8 |
|
|
$ |
77.8 |
|
|
$ |
76.0 |
|
Service cost |
|
|
1.1 |
|
|
|
1.1 |
|
|
|
0.2 |
|
|
|
0.4 |
|
Interest cost |
|
|
62.4 |
|
|
|
64.8 |
|
|
|
3.2 |
|
|
|
3.9 |
|
Participant contributions |
|
|
- |
|
|
|
- |
|
|
|
1.7 |
|
|
|
1.9 |
|
Actuarial losses |
|
|
113.1 |
|
|
|
74.8 |
|
|
|
2.8 |
|
|
|
6.6 |
|
Benefit payments |
|
|
(71.5 |
) |
|
|
(70.4 |
) |
|
|
(9.7 |
) |
|
|
(10.2 |
) |
Plan amendments |
|
|
- |
|
|
|
0.1 |
|
|
|
(6.1 |
) |
|
|
(0.8 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at December 31 |
|
|
1,319.3 |
|
|
|
1,214.2 |
|
|
|
69.9 |
|
|
|
77.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of fair value of plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at previous December 31 |
|
|
740.4 |
|
|
|
682.2 |
|
|
|
- |
|
|
|
- |
|
Actual return on plan assets |
|
|
47.2 |
|
|
|
91.2 |
|
|
|
- |
|
|
|
- |
|
Employer contributions |
|
|
79.6 |
|
|
|
37.4 |
|
|
|
8.0 |
|
|
|
8.3 |
|
Participant contributions |
|
|
- |
|
|
|
- |
|
|
|
1.7 |
|
|
|
1.9 |
|
Benefit payments |
|
|
(71.5 |
) |
|
|
(70.4 |
) |
|
|
(9.7 |
) |
|
|
(10.2 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at December 31 |
|
|
795.7 |
|
|
|
740.4 |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funded status at December 31 |
|
$ |
(523.6 |
) |
|
$ |
(473.8 |
) |
|
$ |
(69.9 |
) |
|
$ |
(77.8 |
) |
|
| Schedule of Amounts Recognized in Consolidated Balance Sheet |
The amounts included in the Company's Consolidated Balance Sheets as of December 31, 2011 and 2010, were as follows:
| |
|
|
|
|
|
|
|
Other |
| |
|
|
|
|
|
|
|
Postretirement |
| |
|
Pension Benefits |
|
|
Benefits |
(in millions) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
| |
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses |
|
$ |
4.0 |
|
|
$ |
4.1 |
|
|
$ |
9.2 |
|
|
$ |
10.4 |
Postretirement benefit liabilities |
|
|
519.6 |
|
|
|
469.7 |
|
|
|
60.7 |
|
|
|
67.4 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount recognized |
|
$ |
523.6 |
|
|
$ |
473.8 |
|
|
$ |
69.9 |
|
|
$ |
77.8 |
|
| Schedule of Projected and Accumulated Benefit Obligation and Fair Value of Plan Assets |
The projected and accumulated benefit obligations and fair value of plan assets for the Company's qualified and nonqualified pension plans at December 31 were as follows:
(in millions) |
|
2011 |
|
|
2010 |
|
| |
|
|
|
|
|
|
Projected benefit obligation |
|
$ |
1,319.3 |
|
|
$ |
1,214.2 |
|
Accumulated benefit obligation |
|
$ |
1,319.3 |
|
|
$ |
1,214.2 |
|
Fair value of plan assets |
|
$ |
795.7 |
|
|
$ |
740.4 |
|
Funded status |
|
|
60 |
% |
|
|
61 |
% |
|
| Activity Recorded in Accumulated Other Comprehensive Income or Loss |
The following pretax activity related to pensions and other postretirement benefits was recorded in Accumulated other comprehensive income (loss) as of December 31:
| |
|
|
|
|
Other |
|
| |
|
|
|
|
Postretirement |
|
| |
|
Pension Benefits |
|
|
Benefits |
|
(in millions) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Prior service costs (credits) |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
0.8 |
|
|
$ |
1.2 |
|
|
$ |
(23.4 |
) |
|
$ |
(26.5 |
) |
Prior service costs (credits) arising during the period |
|
|
- |
|
|
|
0.1 |
|
|
|
(6.1 |
) |
|
|
(0.8 |
) |
Amount recognized as component of net benefit costs |
|
|
(0.7 |
) |
|
|
(0.5 |
) |
|
|
5.2 |
|
|
|
3.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
|
0.1 |
|
|
|
0.8 |
|
|
|
(24.3 |
) |
|
|
(23.4 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
|
494.1 |
|
|
|
483.2 |
|
|
|
13.2 |
|
|
|
6.6 |
|
Actuarial losses arising during the period |
|
|
119.1 |
|
|
|
33.1 |
|
|
|
2.8 |
|
|
|
6.6 |
|
Amount recognized as component of net benefit costs |
|
|
(21.3 |
) |
|
|
(22.2 |
) |
|
|
(1.0 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
|
591.9 |
|
|
|
494.1 |
|
|
|
15.0 |
|
|
|
13.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
592.0 |
|
|
$ |
494.9 |
|
|
$ |
(9.3 |
) |
|
$ |
(10.2 |
) |
|
| Assumed Health Care Cost Trend Rates |
The assumed health care cost trend rate for other postretirement benefits for pre-age 65 benefits as of December 31 was as follows:
| |
Pre-age 65 Benefits |
|
2011 |
|
2010 |
| |
|
|
|
Health care cost trend rate for next year |
7.6% |
|
7.8% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |
4.5% |
|
4.5% |
Year rate reaches the ultimate trend rate |
2028 |
|
2028 |
|
| Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates |
A one percent change in the assumed health care trend rate at December 31, 2011, would have the following effects:
| |
One Percent |
|
One Percent |
(in millions) |
Increase |
|
Decrease |
| |
|
|
|
Effect on total service and interest cost |
$0.1 |
|
$(0.1) |
Effect on accumulated postretirement benefit obligation |
$1.5 |
|
$(1.3) |
|
| Weighted-average assumptions used to determine benefit obligations and net pension and other postretirement benefit costs |
Weighted average assumptions used to determine pension and other postretirement benefit obligations at December 31 were as follows:
| |
|
|
Other |
| |
|
|
Postretirement |
| |
Pension Benefits |
|
Benefits |
| |
2011 |
|
2010 |
|
2011 |
|
2010 |
| |
|
|
|
|
|
|
|
Discount rate |
4.50% |
|
5.30% |
|
4.20% |
|
4.80% |
Rate of compensation increase(A) |
0.00% |
|
0.00% |
|
- |
|
- |
| (A) |
Assumption used in determining pension benefit obligation only. The rate of compensation increase was reduced to 0.00% at
December 31, 2008, as a result of the decision to freeze future benefit accruals for those plans where benefits are based on average compensation.
|
Weighted average assumptions used to determine net pension and other postretirement benefit costs for the years ended December 31 were as follows:
|
2011 |
|
2010 |
|
2009 |
| |
|
|
|
|
|
Discount rate for pension benefits(A) |
5.20%-5.30% |
|
5.85% |
|
6.00%-7.65% |
Discount rate for other postretirement benefits(A) |
4.65%-4.80% |
|
5.45% |
|
5.5%-7.25% |
Long-term rate of return on plan assets(B) |
7.25% |
|
7.50% |
|
8.00% |
Rate of compensation increase(B) |
0.00% |
|
0.00% |
|
0.00% |
| (A) |
Range of discount rates in 2011 and 2009 reflects the remeasurements of pension and postretirement benefit costs during the year
due to negative plan amendments and curtailments recognized.
|
| (B) |
Assumption used in determining pension benefit cost only. |
|
| Schedule of Allocation of Plan Assets |
The Trust asset allocation at December 31, 2011 and 2010, and target allocations for December 31, 2011 were as follows:
|
2011 |
|
2010 |
|
Target
Allocations
|
| |
|
|
|
|
|
Equity securities: |
|
|
|
|
|
United States |
46% |
|
54% |
|
45% |
International |
8% |
|
11% |
|
10% |
Fixed-income securities |
42% |
|
33% |
|
45% |
Short-term investments |
4% |
|
2% |
|
- |
| |
|
|
|
|
|
Total |
100% |
|
100% |
|
100% |
|
| Fair Values of Pension Plan Assets By Asset Class |
The fair values of the Trust's pension assets at December 31, 2011, by asset class were as follows:
| |
Fair Value Measurements at December 31, 2011 (A) |
| |
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
Quoted Prices |
|
|
|
|
|
|
| |
|
|
|
in Active |
|
|
|
|
|
|
| |
|
|
|
Markets for |
|
|
Significant |
|
|
Significant |
| |
|
|
|
Identical |
|
|
Observable |
|
|
Unobservable |
| |
|
|
|
Assets |
|
|
Inputs |
|
|
Inputs |
Asset Class |
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
Short-term investments |
$ |
28.9 |
|
|
$ |
0.1 |
|
|
$ |
28.8 |
|
|
$ |
- |
Equity securities: (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
367.2 |
|
|
|
- |
|
|
|
367.2 |
|
|
|
- |
International |
|
65.4 |
|
|
|
- |
|
|
|
65.4 |
|
|
|
- |
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government securities (C) |
|
113.6 |
|
|
|
75.6 |
|
|
|
38.0 |
|
|
|
- |
Corporate securities (D) |
|
98.5 |
|
|
|
- |
|
|
|
98.5 |
|
|
|
- |
Commingled funds (E) |
|
126.5 |
|
|
|
- |
|
|
|
126.5 |
|
|
|
- |
Total pension assets at fair value |
|
800.1 |
|
|
$ |
75.7 |
|
|
$ |
724.4 |
|
|
$ |
- |
Other assets (F) |
|
(4.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total pension plan net assets |
$ |
795.7 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
See Note 5 – Fair Value Measurements for a description of levels within the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. A description of the valuation methodologies is provided following these tables. There were no significant transfers in and/or out of Level 1, Level 2 and Level 3 in 2011. |
| |
|
(B) |
The majority of equity assets are invested in two indexed funds based on the Russell 3000 Index (U.S.) and the MSCI EAFE Equity Index (International). The Trust did not directly own any of the Company's common stock as of December 31, 2011. |
| |
|
|
Government securities are comprised primarily of U.S. Treasury bonds and other government securities. |
| |
|
|
Corporate securities consist primarily of investment grade bonds issued by companies in diversified industries. |
| |
|
|
This class includes commingled funds that primarily invest in investment grade corporate securities and government-related securities. This class also includes investments in non-agency collateralized mortgage obligation and mortgage-backed securities, futures and options. |
| |
|
|
This class includes interest receivable and receivables/payables for securities sold/purchased. |
| |
|
The fair values of the Trust's pension assets at December 31, 2010, by asset class were as follows:
| |
|
Fair Value Measurements at December 31, 2010 (A) |
| |
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
|
Quoted Prices |
|
|
|
|
|
|
| |
|
|
|
|
in Active |
|
|
|
|
|
|
| |
|
|
|
|
Markets for |
|
|
Significant |
|
|
Significant |
| |
|
|
|
|
Identical |
|
|
Observable |
|
|
Unobservable |
| |
|
|
|
|
Assets |
|
|
Inputs |
|
|
Inputs |
Asset Class |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
Short-term investments |
|
$ |
18.3 |
|
|
$ |
- |
|
|
$ |
18.3 |
|
|
$ |
- |
Equity securities: (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
393.5 |
|
|
|
0.3 |
|
|
|
393.2 |
|
|
|
- |
International |
|
|
82.6 |
|
|
|
- |
|
|
|
82.6 |
|
|
|
- |
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government securities (C) |
|
|
49.8 |
|
|
|
24.6 |
|
|
|
25.2 |
|
|
|
- |
Corporate securities (D) |
|
|
9.1 |
|
|
|
- |
|
|
|
9.1 |
|
|
|
- |
Commingled funds (E) |
|
|
186.7 |
|
|
|
- |
|
|
|
186.7 |
|
|
|
- |
Real estate (F) |
|
|
0.9 |
|
|
|
- |
|
|
|
- |
|
|
|
0.9 |
Other investments (G) |
|
|
0.6 |
|
|
|
- |
|
|
|
0.6 |
|
|
|
- |
Total pension assets at fair value |
|
|
741.5 |
|
|
$ |
24.9 |
|
|
$ |
715.7 |
|
|
$ |
0.9 |
Other assets (H) |
|
|
(1.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total pension plan net assets |
|
$ |
740.4 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
See Note 5 – Fair Value Measurements for a description of levels within the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. A description of the valuation methodologies is provided following these tables. There were no significant transfers in and/or out of Level 1, Level 2 and Level 3 in 2010. |
| |
|
|
Effective June 2010, active equity managers were replaced with a passive equity manager. The majority of equity assets are invested in two indexed funds based on the Russell 3000 Index (U.S.) and the MSCI EAFE Equity Index (International). The Trust did not directly own any of the Company's common stock as of December 31, 2010. |
| |
|
|
Government securities are comprised primarily of U.S. Treasury bonds and to a lesser extent other government securities. |
| |
|
|
Corporate securities consist primarily of investment grade bonds issued by companies in diversified industries. |
| |
|
|
This class includes commingled funds that primarily invest in government-related securities and investment grade corporate securities. This class also includes nominal investments in non-agency collateralized mortgage obligation and mortgage-backed securities, futures and options. |
| |
|
|
This class represents a limited partnership real estate fund with investments in apartments. This fund was fully liquidated in 2011. |
| |
|
|
This class includes a small amount of derivatives (interest rate swaps, options and futures). |
| |
|
|
This class includes dividends and interest receivable and receivables or payables for securities sold or purchased. |
|
| Reconciliation of changes in the fair value measurements of pension plan assets using significant unobservable inputs |
A reconciliation of the changes in the fair value measurements of pension plan assets using significant unobservable inputs (Level 3) for the year ended December 31, 2011, follows:
| |
|
Real |
|
(in millions) |
|
Estate |
|
| |
|
|
|
Beginning balance at December 31, 2010 |
|
$ |
0.9 |
|
Actual return on plan assets: |
|
|
|
|
Unrealized gains (losses) |
|
|
- |
|
Realized gains (losses) |
|
|
- |
|
Purchases, sales and settlements |
|
|
(0.9 |
) |
Transfers in/(out) |
|
|
- |
|
| |
|
|
|
|
Ending balance at December 31, 2011 |
|
$ |
- |
|
A reconciliation of the changes in the fair value measurements of pension plan assets using significant unobservable inputs (Level 3) for the year ended December 31, 2010, follows:
| |
|
United States |
|
|
Real |
|
|
Other |
|
|
|
|
(in millions) |
|
Equities |
|
|
Estate |
|
|
Investments |
|
|
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance at December 31, 2009 |
|
$ |
2.3 |
|
|
$ |
79.8 |
|
|
$ |
5.8 |
|
|
$ |
87.9 |
|
Actual return on plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) |
|
|
0.3 |
|
|
|
8.3 |
|
|
|
10.2 |
|
|
|
18.8 |
|
Realized gains (losses) |
|
|
- |
|
|
|
(11.2 |
) |
|
|
(10.2 |
) |
|
|
(21.4 |
) |
Purchases, sales and settlements |
|
|
(2.3 |
) |
|
|
(76.0 |
) |
|
|
(5.8 |
) |
|
|
(84.1 |
) |
Transfers in/(out) |
|
|
(0.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
(0.3 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at December 31, 2010 |
|
$ |
- |
|
|
$ |
0.9 |
|
|
$ |
- |
|
|
$ |
0.9 |
|
|
| Schedule of Expected Cash Flows |
The expected cash flows for the Company's pension and other postretirement benefit plans follow:
|
(in millions)
|
|
Pension Benefits |
|
|
Other Post- retirement Benefits |
| |
|
|
|
|
|
Company contributions expected to be made in 2012 (A) |
|
$ |
79.0 |
|
|
$ |
9.2 |
Expected benefit payments (which reflect future service): |
|
|
|
|
|
|
|
2012 |
|
$ |
76.1 |
|
|
$ |
9.2 |
2013 |
|
$ |
77.9 |
|
|
$ |
7.9 |
2014 |
|
$ |
79.6 |
|
|
$ |
6.7 |
2015 |
|
$ |
80.9 |
|
|
$ |
6.3 |
2016 |
|
$ |
82.0 |
|
|
$ |
6.0 |
2017-2021 |
|
$ |
418.0 |
|
|
$ |
24.1 |
| (A) |
The Company currently anticipates contributing approximately $75.0 million to fund the qualified pension plans and approximately $4.0 million to cover benefit payments in the unfunded, nonqualified pension plan in 2012. Company contributions are subject to change based on market conditions or Company discretion
|
|