|
EMPLOYEE BENEFIT AND STOCK COMPENSATION PLANS (Tables)
|
12 Months Ended |
|
Dec. 31, 2011
|
| EMPLOYEE BENEFIT AND STOCK COMPENSATION PLANS |
|
| Schedule of funded status of the Plans |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
(in thousands)
|
|
2011
|
|
2010
|
|
| |
|
|
CHANGE IN ACCUMULATED BENEFIT OBLIGATION
|
|
|
|
|
|
|
|
|
Accumulated Benefit obligation at beginning of year
|
|
$ |
183,972 |
|
$ |
159,539 |
|
|
Pension plans acquired upon acquisitions of companies
|
|
|
— |
|
|
5,317 |
|
|
Service cost
|
|
|
158 |
|
|
86 |
|
|
Interest cost
|
|
|
9,879 |
|
|
9,514 |
|
|
Actuarial (gain) loss
|
|
|
12,205 |
|
|
16,651 |
|
|
Benefits paid
|
|
|
(8,793 |
) |
|
(7,135 |
) |
|
Liability gain due to curtailment
|
|
|
(510 |
) |
|
— |
|
| |
|
|
|
|
Accumulated Benefit obligation at end of year
|
|
|
196,911 |
|
|
183,972 |
|
|
CHANGE IN PLAN ASSETS
|
|
|
|
|
|
|
|
|
Market value of plan assets at beginning of year
|
|
|
171,457 |
|
|
144,644 |
|
|
Pension plans acquired upon acquisitions of companies
|
|
|
— |
|
|
3,733 |
|
|
Actual return on plan assets
|
|
|
(2,520 |
) |
|
25,039 |
|
|
Employer contribution
|
|
|
4,900 |
|
|
5,176 |
|
|
Benefits paid
|
|
|
(8,793 |
) |
|
(7,135 |
) |
| |
|
|
|
|
Fair value of plan assets at end of year
|
|
|
165,044 |
|
|
171,457 |
|
| |
|
|
|
|
Funded status
|
|
$ |
(31,867 |
) |
$ |
(12,515 |
) |
| |
|
|
|
|
|
|
| Schedule of amounts recognized in the statement of financial position |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
(in thousands)
|
|
2011
|
|
2010
|
|
| |
|
|
Noncurrent liabilities
|
|
$ |
(31,867 |
) |
$ |
(12,515 |
) |
| |
|
|
|
|
|
|
|
| Schedule of amounts recognized in accumulated other comprehensive income |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
(in thousands)
|
|
2011
|
|
2010
|
|
| |
|
|
Net loss
|
|
$ |
87,035 |
|
$ |
62,538 |
|
| |
|
|
|
|
| Schedule of weighted-average assumptions used |
|
|
December 31, |
|
|
|
2011
|
|
2010
|
|
2009
|
|
| |
|
|
ACCUMULATED BENEFIT OBLIGATION
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
|
5.01 |
% |
|
5.51 |
% |
|
6.01 |
% |
|
Rate of compensation increase
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
NET BENEFIT COST
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
|
5.51 |
% |
|
6.01 |
% |
|
6.81 |
% |
|
Expected return on plan assets
|
|
|
7.00 |
% |
|
7.00 |
% |
|
7.00 |
% |
|
Rate of compensation increase
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
| |
|
|
|
|
| Schedule of net periodic benefit cost and other amounts recognized in other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
(in thousands)
|
|
2011
|
|
2010
|
|
2009
|
|
| |
|
|
Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
$ |
158 |
|
$ |
86 |
|
$ |
— |
|
|
Interest cost
|
|
|
9,879 |
|
|
9,514 |
|
|
9,530 |
|
|
Expected return on plan assets
|
|
|
(12,080 |
) |
|
(11,437 |
) |
|
(10,974 |
) |
|
Amortization of net loss
|
|
|
1,800 |
|
|
1,115 |
|
|
963 |
|
| |
|
|
|
|
Net periodic benefit
|
|
$ |
(243 |
) |
$ |
(722 |
) |
$ |
(481 |
) |
| |
|
|
|
|
Other Changes in Plan Assets and Benefit Obligations
Recognized in Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
Net (gain)/loss
|
|
$ |
26,297 |
|
$ |
3,048 |
|
$ |
986 |
|
|
Amortization of net loss
|
|
|
(1,800 |
) |
|
(1,115 |
) |
|
(963 |
) |
| |
|
|
|
|
Total recognized in other comprehensive income
|
|
|
24,497 |
|
|
1,933 |
|
|
23 |
|
| |
|
|
|
|
Total recognized in net periodic benefit cost and other comprehensive income
|
|
$ |
24,254 |
|
$ |
1,211 |
|
$ |
(458 |
) |
| |
|
|
|
|
| Schedule of weighted average asset allocation along with target allocation |
|
|
|
|
|
|
|
Asset category
|
|
2012
|
|
2011
|
|
2010
|
| |
|
Cash
|
|
0% – 5% |
|
0.6% |
|
1.1% |
|
Equity Securities – Rollins stock
|
|
10% – 20% |
|
20.6% |
|
18.1% |
|
Domestic Equity – all other
|
|
20% – 30% |
|
12.7% |
|
21.7% |
|
Global Equity
|
|
10% – 20% |
|
11.4% |
|
3.6% |
|
International Equity
|
|
10% – 20% |
|
11.6% |
|
11.3% |
|
Debt Securities – core fixed income
|
|
15% – 50% |
|
18.9% |
|
21.4% |
|
Tactical Composite
|
|
10% – 20% |
|
12.5% |
|
8.3% |
|
Real Estate
|
|
0% – 10% |
|
4.3% |
|
3.7% |
|
Real Return
|
|
0% – 10% |
|
7.4% |
|
4.6% |
|
Other
|
|
0% – 5% |
|
0.0% |
|
6.2% |
| |
|
|
|
Total
|
|
100.0% |
|
100.0% |
|
100.0% |
| |
|
|
| Schedule of plan assets using the fair value hierarchy |
|
The following table presents our plan assets using the fair value hierarchy as of December 31, 2011. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
| |
|
|
(1)
|
|
Cash and Cash Equivalents
|
|
$ |
918 |
|
$ |
918 |
|
$ |
— |
|
$ |
— |
|
|
(2)
|
|
Fixed Income Securities
|
|
|
31,167 |
|
|
— |
|
|
31,167 |
|
|
— |
|
|
|
|
Domestic Equity Securities
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Rollins, Inc. Stock
|
|
|
34,050 |
|
|
34,050 |
|
|
— |
|
|
— |
|
|
|
|
Other Securities
|
|
|
21,032 |
|
|
21,032 |
|
|
— |
|
|
— |
|
|
|
|
Global Equity Securities
|
|
|
18,751 |
|
|
18,751 |
|
|
— |
|
|
— |
|
|
(3)
|
|
International Equity Securities
|
|
|
19,120 |
|
|
9,316 |
|
|
9,804 |
|
|
— |
|
|
(4)
|
|
Tactical Composite
|
|
|
20,680 |
|
|
— |
|
|
20,680 |
|
|
— |
|
|
(5)
|
|
Real Estate
|
|
|
7,092 |
|
|
— |
|
|
— |
|
|
7,092 |
|
|
(6)
|
|
Real Return
|
|
|
12,234 |
|
|
— |
|
|
12,234 |
|
|
— |
|
|
(7)
|
|
Alternative Investments
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| |
|
|
|
|
Total
|
|
$ |
165,044 |
|
$ |
84,067 |
|
$ |
73,885 |
|
$ |
7,092 |
|
| |
|
The following table presents our plan assets using the fair value hierarchy as of December 31, 2010. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
| |
|
|
(1)
|
|
Cash and Cash Equivalents
|
|
$ |
10,747 |
|
$ |
10,747 |
|
$ |
— |
|
$ |
— |
|
|
(2)
|
|
Fixed Income Securities
|
|
|
37,464 |
|
|
— |
|
|
37,464 |
|
|
— |
|
|
|
|
Domestic Equity Securities
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Rollins, Inc. Stock
|
|
|
30,265 |
|
|
30,265 |
|
|
— |
|
|
— |
|
|
|
|
Other Securities
|
|
|
37,989 |
|
|
37,989 |
|
|
— |
|
|
— |
|
|
|
|
Global Equity Securities
|
|
|
5,953 |
|
|
— |
|
|
5,953 |
|
|
— |
|
|
(3)
|
|
International Equity Securities
|
|
|
19,789 |
|
|
9,272 |
|
|
10,517 |
|
|
— |
|
|
(4)
|
|
Tactical Composite
|
|
|
13,875 |
|
|
— |
|
|
13,875 |
|
|
— |
|
|
(5)
|
|
Real Estate
|
|
|
6,248 |
|
|
— |
|
|
— |
|
|
6,248 |
|
|
(6)
|
|
Real Return
|
|
|
7,704 |
|
|
— |
|
|
7,704 |
|
|
— |
|
|
(7)
|
|
Alternative Investments
|
|
|
1,423 |
|
|
— |
|
|
— |
|
|
1,423 |
|
| |
|
|
|
|
Total
|
|
$ |
171,457 |
|
$ |
88,273 |
|
$ |
75,513 |
|
$ |
7,671 |
|
| |
|
-
(1)
- Cash and cash equivalents, which are used to pay benefits and plan administrative expenses, are held in Rule 2a-7 money market funds.
-
(2)
- Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades.
-
(3)
- Some International equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets.
-
(4)
- Tactical Composite funds invest in stocks, bonds and cash, both domestic and international. These assets are valued primarily using a market approach based on the quoted market prices of identical instruments in their respective markets.
-
(5)
- Real estate fund values are primarily reported by the fund manager and are based on valuation of the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data.
-
(6)
- Real Return funds invest in global equities, commodities and inflation protected core bonds that are valued primarily using a market approach based on the quoted market prices of identical instruments in their respective markets.
-
(7)
- Alternative Investments are Hedge Funds consisting of fund-of-fund LLC or commingled fund structures. The LLCs are primarily valued based on Net Asset Values [NAVs] calculated by the fund and are not publicly available. The commingled fund NAV is calculated by the manager on a daily basis and has monthly liquidity. The Company is in the process of liquidating the Plans' alternative investments.
|
|
|
| Schedule of reconciliation of level 3 assets |
|
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31,
2010
|
|
Net Realized
and Unrealized
Gains/(Losses)
|
|
Net
Purchases,
Issuances and
Settlements
|
|
Net
Transfers
In to/
(Out of)
Level 3
|
|
Balance at
December 31,
2011
|
|
| |
|
|
Real Estate
|
|
$ |
6,248 |
|
$ |
844 |
|
$ |
— |
|
$ |
— |
|
$ |
7,092 |
|
|
Alternative Investments
|
|
|
1,423 |
|
|
(11 |
) |
|
(1,412 |
) |
|
— |
|
|
— |
|
| |
|
|
Total
|
|
$ |
7,671 |
|
$ |
833 |
|
$ |
(1,412 |
) |
$ |
— |
|
$ |
7,092 |
|
| |
|
The following table presents a reconciliation of Level 3 assets held during the year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31,
2009
|
|
Net Realized
and Unrealized
Gains/(Losses)
|
|
Net
Purchases,
Issuances and
Settlements
|
|
Net
Transfers
In to/
(Out of)
Level 3
|
|
Balance at
December 31,
2010
|
|
| |
|
|
Real Estate
|
|
$ |
5,209 |
|
$ |
1,039 |
|
$ |
— |
|
$ |
— |
|
$ |
6,248 |
|
|
Alternative Investments
|
|
|
21,832 |
|
|
1,269 |
|
|
(12,799 |
) |
|
(8,879 |
) |
|
1,423 |
|
| |
|
|
Total
|
|
$ |
27,041 |
|
$ |
2,308 |
|
$ |
(12,799 |
) |
$ |
(8,879 |
) |
$ |
7,671 |
|
| |
|
|
|
| Schedule of estimated future benefit payments |
|
|
|
|
|
(in thousands)
|
|
|
|
| |
|
| 2012 |
|
|
9,088 |
|
| 2013 |
|
|
9,637 |
|
| 2014 |
|
|
10,218 |
|
| 2015 |
|
|
10,819 |
|
| 2016 |
|
|
11,375 |
|
| Thereafter |
|
|
62,715 |
|
| |
|
| Total |
|
$ |
113,852 |
|
| |
|
|
|
|
| Schedule of estimated life insurance premium payments |
|
|
|
|
|
(in thousands)
|
|
|
|
| |
|
| 2012 |
|
$ |
1,631 |
|
| 2013 |
|
|
1,698 |
|
| 2014 |
|
|
1,801 |
|
| 2015 |
|
|
1,810 |
|
| 2016 |
|
|
1,690 |
|
| |
|
| Total |
|
$ |
8,630 |
|
| |
|
|
|
|
| Components of the stock-based compensation programs recorded as expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended December 31, |
|
|
|
2011
|
|
2010
|
|
2009
|
|
| |
|
|
Time Lapse Restricted Stock:
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax compensation expense
|
|
$ |
7,555 |
|
$ |
7,538 |
|
$ |
5,800 |
|
|
Tax benefit
|
|
|
(2,909 |
) |
|
(2,902 |
) |
|
(2,233 |
) |
| |
|
|
|
|
Restricted stock expense, net of tax
|
|
$ |
4,646 |
|
$ |
4,636 |
|
$ |
3,567 |
|
| |
|
|
|
|
| Options activity outstanding of stock option plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
|
|
| |
|
|
Outstanding at December 31, 2008
|
|
|
986 |
|
|
4.71 |
|
|
3.39 |
|
|
7,236 |
|
|
Exercised
|
|
|
(328 |
) |
|
4.84 |
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(5 |
) |
|
3.22 |
|
|
|
|
|
|
|
| |
|
|
|
|
Outstanding at December 31, 2009
|
|
|
653 |
|
|
4.67 |
|
|
2.44 |
|
|
5,348 |
|
|
Exercised
|
|
|
(517 |
) |
|
4.67 |
|
|
|
|
|
|
|
| |
|
|
|
|
Outstanding at December 31, 2010
|
|
|
136 |
|
|
4.66 |
|
|
1.59 |
|
|
2,056 |
|
|
Exercised
|
|
|
(103 |
) |
|
4.48 |
|
|
|
|
|
|
|
| |
|
|
|
|
Outstanding at December 31, 2011
|
|
|
33 |
|
$ |
5.26 |
|
|
0.93 |
|
$ |
553 |
|
| |
|
|
|
|
Exercisable at December 31, 2011
|
|
|
33 |
|
$ |
5.26 |
|
|
0.93 |
|
$ |
553 |
|
| |
|
|
|
|
| Summarized information on unvested restricted stock units outstanding |
|
|
|
|
|
|
|
|
|
|
Number of
Shares
(in thousands)
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
| |
|
|
Unvested Restricted Stock Grants
|
|
|
|
|
|
|
|
|
Unvested as of December 31, 2008
|
|
|
2,453 |
|
$ |
9.80 |
|
|
Forfeited
|
|
|
(26 |
) |
|
9.48 |
|
|
Vested
|
|
|
(412 |
) |
|
8.51 |
|
|
Granted
|
|
|
721 |
|
|
10.99 |
|
| |
|
|
|
|
Unvested as of December 31, 2009
|
|
|
2,737 |
|
|
10.31 |
|
|
Forfeited
|
|
|
(277 |
) |
|
10.99 |
|
|
Vested
|
|
|
(666 |
) |
|
9.51 |
|
|
Granted
|
|
|
871 |
|
|
12.32 |
|
| |
|
|
|
|
Unvested as of December 31, 2010
|
|
|
2,664 |
|
|
11.09 |
|
|
Forfeited
|
|
|
(74 |
) |
|
12.90 |
|
|
Vested
|
|
|
(574 |
) |
|
10.08 |
|
|
Granted
|
|
|
670 |
|
|
19.30 |
|
| |
|
|
|
|
Unvested as of December 31, 2011
|
|
|
2,686 |
|
$ |
13.31 |
|
| |
|
|
|