Tecumseh Products 2012 Annual Report Download - page 45

44
NOTE 3. Inventories
The components of inventories are as follows:
December 31,
(in millions) 2012 2011
Raw materials, net of reserves...................................................................................... $ 76.6 $ 72.1
Work in progress .......................................................................................................... 2.1 2.0
Finished goods, net of reserves .................................................................................... 44.6 61.8
Inventories.................................................................................................................... $ 123.3 $ 135.9
Raw materials are net of a $4.2 million and $4.4 million reserve for obsolete and slow moving inventory at December 31, 2012
and December 31, 2011, respectively. Finished goods are net of a $2.7 million and $2.5 million reserve for obsolete and slow
moving inventory and lower of cost or market at December 31, 2012 and 2011, respectively.
NOTE 4. Property, Plant and Equipment, net
The components of property, plant and equipment, net are as follows:
December 31,
(in millions) 2012 2011
Land and land improvements ...................................................................................... $ 11.3 $ 13.8
Buildings...................................................................................................................... 95.0 91.0
Machinery and equipment ........................................................................................... 791.3 827.7
Capital leases ............................................................................................................... 2.0—
899.6 932.5
Less accumulated depreciation............................................................................. 748.0 754.6
151.6 177.9
Construction in process ............................................................................................... 5.4 11.5
Property, plant and equipment, net.............................................................................. $ 157.0 $ 189.4
Depreciation expense associated with property, plant and equipment was $36.3 million, $40.5 million and $39.3 million for the
years ended December 31, 2012, 2011 and 2010, respectively.
NOTE 5. Pension and Other Postretirement Benefit Plans
We have a defined benefit retirement plan that covers substantially all domestic employees; this plan was frozen to new hires
after January 15, 2011. Pension benefits covering salaried employees generally provide benefits that are based on average
earnings and years of credited service. Pension benefits covering hourly employees generally provide benefits of stated
amounts for each year of service.
With regard to our retiree health care benefit plan, in the second quarter of 2012 we informed employees and current retirees
that (1) effective May 1, 2012 we would no longer provide life insurance benefits to eligible current and future salaried retirees
of the Company, (2) effective December 31, 2013, we would no longer provide pre-age 65 retiree group health care benefits to
current salaried employees and current salaried retirees of the Company who could participate or who are currently
participating in the Plan and (3) effective May 1, 2012, all current employees who have not satisfied the age and Company
service requirements as of May 1, 2012, for eligibility and participation in the Plan providing pre-age 65 retiree group health
care benefits, will no longer be eligible.
We use December 31 as the measurement date for determining pension and other postretirement benefits. Information regarding
the funded status and net periodic benefit costs was reconciled to or stated as of the year ended December 31.