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Pension and Defined Contribution Plans | 12 Months Ended
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Aug. 31, 2022
Retirement Benefits [Abstract] |
Pension and Defined Contribution Plans | Pension and Defined Contribution Plans Company-sponsored Pension Plans We have several pension plans, both qualified and non-qualified, covering certain hourly and salaried employees. Benefits paid under these plans are based generally on employees’ years of service and/or compensation during the final years of employment. We historically have made at least the minimum annual contributions to the plans to the extent indicated by actuarial valuations and statutory requirements. Plan assets are invested primarily in equity and fixed income securities. Current period net actuarial gains in our projected benefit obligation primarily reflect an increase in the discount rate from our prior year valuation. The following tables reflect the status of our domestic (U.S.-based) and international pension plans as of the dates presented (in millions):
| Domestic Plans |  | International Plans
| August 31, |  | August 31,
| 2022 |  | 2021 |  | 2022 |  | 2021
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 224.7 |  |  | $ | 249.6 |  |  | $ | 52.6 |  |  | $ | 49.2 |
Service cost | 4.4 |  |  | 4.6 |  |  | 0.4 |  |  | 0.3 |
Interest cost | 5.3 |  |  | 5.3 |  |  | 0.9 |  |  | 0.9 |
Actuarial (gains) losses | (43.1) |  |  | (5.2) |  |  | (17.1) |  |  | 1.7 |
Benefits paid | (15.3) |  |  | (29.6) |  |  | (2.1) |  |  | (1.3) |
Other | — |  |  | — |  |  | (3.2) |  |  | 1.8 |
Benefit obligation at end of year | 176.0 |  |  | 224.7 |  |  | 31.5 |  |  | 52.6 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 182.6 |  |  | 167.1 |  |  | 42.2 |  |  | 35.1 |
Actual return on plan assets | (33.6) |  |  | 21.7 |  |  | (11.6) |  |  | 5.3 |
Employer contributions | 7.8 |  |  | 23.4 |  |  | 3.0 |  |  | 2.1 |
Benefits paid | (15.3) |  |  | (29.6) |  |  | (2.1) |  |  | (1.3) |
Other | — |  |  | — |  |  | (3.0) |  |  | 1.0 |
Fair value of plan assets at end of year | 141.5 |  |  | 182.6 |  |  | 28.5 |  |  | 42.2 |
Funded status at the end of year | $ | (34.5) |  |  | $ | (42.1) |  |  | $ | (3.0) |  |  | $ | (10.4) |
Amounts recognized in the consolidated balance sheets consist of: |  |  |  |  |  |  |
Non-current assets | $ | 7.6 |  |  | $ | 13.0 |  |  | $ | 0.4 |  |  | $ | — |
Current liabilities | (3.9) |  |  | (5.2) |  |  | (0.2) |  |  | (0.1) |
Non-current liabilities | (38.2) |  |  | (49.9) |  |  | (3.2) |  |  | (10.3) |
Net amount recognized in consolidated balance sheets | $ | (34.5) |  |  | $ | (42.1) |  |  | $ | (3.0) |  |  | $ | (10.4) |
Accumulated benefit obligation | $ | 175.3 |  |  | $ | 223.8 |  |  | $ | 31.3 |  |  | $ | 51.7 |
Pre-tax amounts in accumulated other comprehensive loss: |  |  |  |  |  |  |
Prior service cost | $ | (2.7) |  |  | $ | (5.6) |  |  | $ | (0.1) |  |  | $ | (0.1) |
Net actuarial loss | (54.2) |  |  | (55.2) |  |  | (6.5) |  |  | (11.3) |
Amounts in accumulated other comprehensive loss | $ | (56.9) |  |  | $ | (60.8) |  |  | $ | (6.6) |  |  | $ | (11.4) |
Pensions plans in which benefit obligation exceeds plan assets: |  |  |  |  |  |  |
Projected benefit obligation | $ | 42.1 |  |  | $ | 81.7 |  |  | $ | 3.4 |  |  | $ | 52.6 |
Accumulated benefit obligation | 41.4 |  |  | 80.8 |  |  | 2.3 |  |  | 51.7 |
Plan assets | — |  |  | 26.6 |  |  | — |  |  | 42.2 |
Pensions plans in which plan assets exceed benefit obligation: |  |  |  |  |  |  |
Projected benefit obligation | $ | 133.9 |  |  | $ | 143.0 |  |  | $ | 28.1 |  |  | $ | — |
Accumulated benefit obligation | 133.9 |  |  | 143.0 |  |  | 29.0 |  |  | — |
Plan assets | 141.5 |  |  | 156.0 |  |  | 28.5 |  |  | — |
Service cost of net periodic pension cost is allocated between Cost of products sold, and may be capitalized into inventory as labor costs, and Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the function of the employee's services. All other components of net periodic pension cost are included within Miscellaneous (income) expense, net in the Consolidated Statements of Comprehensive Income. We utilize a corridor approach to amortize cumulative unrecognized actuarial gains or losses over either the average expected future service of active participants or average life expectancy of plan participants based on each plan’s composition. The corridor is determined as the greater of the excess of 10% of plan assets or the projected benefit obligation at each valuation date. Amounts related to prior service cost are amortized over the average remaining expected future service period for active participants in each plan. Net periodic pension cost during the periods presented included the following components before tax (in millions):
| Domestic Plans |  | International Plans
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Service cost | $ | 4.4 |  |  | $ | 4.6 |  |  | $ | 4.3 |  |  | $ | 0.4 |  |  | $ | 0.3 |  |  | $ | 0.3 |
Interest cost | 5.3 |  |  | 5.3 |  |  | 6.4 |  |  | 0.9 |  |  | 0.9 |  |  | 0.9 |
Expected return on plan assets | (11.2) |  |  | (11.0) |  |  | (10.4) |  |  | (2.6) |  |  | (2.3) |  |  | (2.0) |
Amortization of prior service cost | 2.9 |  |  | 2.9 |  |  | 4.0 |  |  | — |  |  | — |  |  | — |
Settlement | 0.4 |  |  | 3.9 |  |  | — |  |  | — |  |  | — |  |  | — |
Recognized actuarial loss | 2.4 |  |  | 4.1 |  |  | 4.2 |  |  | 0.9 |  |  | 1.4 |  |  | 1.4 |
Net periodic pension cost | $ | 4.2 |  |  | $ | 9.8 |  |  | $ | 8.5 |  |  | $ | (0.4) |  |  | $ | 0.3 |  |  | $ | 0.6 |
Weighted average assumptions used in computing the benefit obligation are as follows:
| Domestic Plans |  | International Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Discount rate | 4.4 | % |  | 2.4 % |  | 4.9 | % |  | 1.9 %
Rate of compensation increase | 5.0 | % |  | 5.0 % |  | 3.5 | % |  | 3.4 %
Weighted average assumptions used in computing net periodic pension cost are as follows:
| Domestic Plans |  | International Plans
| 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Discount rate | 2.4 % |  | 2.2 | % |  | 2.8 | % |  | 1.9 % |  | 1.9 | % |  | 2.0 | %
Expected return on plan assets | 6.3 | % |  | 6.8 | % |  | 7.0 | % |  | 6.4 | % |  | 6.5 | % |  | 6.5 | %
Rate of compensation increase | 5.0 % |  | 5.0 | % |  | 5.0 | % |  | 3.4 % |  | 3.4 | % |  | 3.0 | %
It is our policy to adjust, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high-quality, long-term obligations based on our estimated benefit payments available as of the measurement date. We use published yield curves to assist in the development of our discount rates. We estimate that a 100 basis point increase in the discount rate would reduce net periodic pension cost approximately $0.6 million for the domestic plans and $0.5 million for the international plans. The expected return on plan assets is derived primarily from a periodic study of long-term historical rates of return on the various asset classes included in our targeted pension plan asset allocation as well as future expectations. We estimate that each 100 basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of $1.6 million and $0.3 million for domestic plans and international plans, respectively. We also evaluate the rate of compensation increase annually and adjust if necessary. Our investment objective for domestic plan assets is to earn a rate of return sufficient to exceed the long-term growth of the plans’ liabilities without subjecting plan assets to undue risk. The plan assets are invested primarily in high quality debt and equity securities. We conduct a periodic strategic asset allocation study to form a basis for the allocation of pension assets between various asset categories. Specific allocation percentages are assigned to each asset category with minimum and maximum ranges established for each. The assets are then managed within these ranges. At August 31, 2022, the U.S. targeted asset allocation was 30% equity securities, 65% fixed income securities, and 5% real estate securities. Our investment objective for the international plan assets is also to add value by exceeding the long-term growth of the plans’ liabilities. At August 31, 2022, the international asset target allocation approximated 15% equity securities, 25% fixed income securities, and 60% multi-strategy investments. Our pension plan asset allocation by asset category as of the dates presented is as follows:
| % of Plan Assets
| Domestic Plans |  | International Plans
| 2022 |  | 2021 |  | 2022 |  | 2021
Equity securities | 31.6 | % |  | 41.2 | % |  | 16.8 | % |  | 16.1 | %
Fixed income securities | 61.2 | % |  | 54.3 | % |  | 22.8 | % |  | 20.1 | %
Multi-strategy investments | — | % |  | — | % |  | 60.4 | % |  | 63.8 | %
Real estate | 7.2 | % |  | 4.5 | % |  | — | % |  | — | %
Total | 100.0 | % |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
Our pension plan assets are stated at fair value based on quoted market prices in an active market, quoted redemption values, or estimates based on reasonable assumptions as of the most recent measurement period. See the Fair Value Measurements footnote for a description of the fair value guidance. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. Certain pension assets valued at net asset value (“NAV”) per share as a practical expedient are excluded from the fair value hierarchy. Investments in pension plan assets are described in further detail below. Short-term Fixed Income Investments Short-term investments consist of money market funds, which are valued at the daily closing price as reported by the relevant fund (Level 1). Mutual Funds Mutual funds held by the domestic plans are open-end mutual funds that are registered with the Securities and Exchange Commission (“SEC”) and seek to either replicate or outperform a related index. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the domestic plans are deemed to be actively traded (Level 1). Collective Trust The collective trust seeks to outperform the overall small-cap stock market and is comprised primarily of small-cap equity securities with quoted prices in active markets for identical investments. The value of this fund is calculated on each business day based on its daily net asset value; however, the collective trust is not deemed to be actively traded (Level 2). Fixed Income Investments The fixed income fund seeks to maximize total return by investing primarily in a diversified portfolio of intermediate and long-term debt securities and is valued using the NAV of units of a management investment company’s trust. The NAV, as provided by the fund's trustee, is used as a practical expedient to estimate fair value. As such, these funds are excluded from the fair value hierarchy. The NAV is based on the fair value of the underlying investments held by the fund less the fund's liabilities. Real Estate Fund The real estate fund invests primarily in commercial real estate and includes mortgage loans that are backed by the associated property's investment objective. The fund seeks real estate returns, risk, and liquidity appropriate to a core fund. The fund also seeks to provide current income with the potential for long-term capital appreciation. This investment is valued based on the NAV per share, without further adjustment. The NAV, as provided by the fund's trustee, is used as a practical expedient to estimate fair value and is therefore excluded from the fair value hierarchy. NAV is based on the fair value of the underlying investments. Investors may request to redeem all or any portion of their shares on a quarterly basis. Each investor must provide a written redemption request at least sixty days prior to the end of the quarter for which the request is to be effective. If insufficient funds are available to honor all redemption requests at any point in time, available funds will be allocated pro-rata based on the total number of shares held by each investor. All decisions regarding whether to honor redemption requests are made by the fund’s board of directors. The following tables present the fair value of the domestic pension plan assets by major category as of the dates presented (in millions):
|  |  | Fair Value Measurements
| Fair Value as of |  | Quoted Market Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| August 31, 2022 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets included in the fair value hierarchy: |  |  |  |  |  |  |
Mutual funds: |  |  |  |  |  |  |
Domestic large cap equity fund | $ | 23.7 |  |  | $ | 23.7 |  |  | $ | — |  |  | $ | — |
Foreign equity fund | 12.6 |  |  | 12.6 |  |  | — |  |  | — |
Collective trust: Domestic small cap equities | 8.4 |  |  | — |  |  | 8.4 |  |  | — |
Short-term fixed income investments | 2.1 |  |  | 2.1 |  |  | — |  |  | — |
Total assets in the fair value hierarchy | 46.8 |  |  |  |  |  |  |
Assets calculated at net asset value: |  |  |  |  |  |  |
Fixed-income investments | 84.5 |  |  |  |  |  |  |
Real estate fund | 10.2 |  |  |  |  |  |  |
Total assets at net asset value | 94.7 |  |  |  |  |  |  |
Total assets at fair value | $ | 141.5 |  |  |  |  |  |  |
|  |  | Fair Value Measurements
| Fair Value as of |  | Quoted Market Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| August 31, 2021 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets included in the fair value hierarchy: |  |  |  |  |  |  |
Mutual funds: |  |  |  |  |  |  |
Domestic large cap equity fund | $ | 38.9 |  |  | $ | 38.9 |  |  | $ | — |  |  | $ | — |
Foreign equity fund | 23.1 |  |  | 23.1 |  |  | — |  |  | — |
Collective trust: Domestic small cap equities | 13.3 |  |  | — |  |  | 13.3 |  |  | — |
Short-term fixed income investments | 6.9 |  |  | 6.9 |  |  | — |  |  | — |
Total assets in the fair value hierarchy | 82.2 |  |  |  |  |  |  |
Assets calculated at net asset value: |  |  |  |  |  |  |
Fixed-income investments | 92.3 |  |  |  |  |  |  |
Real estate fund | 8.1 |  |  |  |  |  |  |
Total assets at net asset value | 100.4 |  |  |  |  |  |  |
Total assets at fair value | $ | 182.6 |  |  |  |  |  |  |
International Plan Investments The international plans' assets consist primarily of funds invested in equity securities, multi-strategy investments, and fixed income investments. These securities are calculated using the values of the underlying holdings (i.e. significant observable inputs) but do not have quoted prices in active markets (Level 2). The short-term fixed income investments represents cash and cash equivalents held by the funds at fiscal year end (Level 1). The following tables present the fair value of the international pension plan assets by major category as of the dates presented (in millions):
|  |  | Fair Value Measurements
| Fair Value as of |  | Quoted Market Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| August 31, 2022 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets included in the fair value hierarchy: |  |  |  |  |  |  |
Equity securities | $ | 4.8 |  |  | $ | — |  |  | $ | 4.8 |  |  | $ | — |
Short-term fixed income investments | 0.3 |  |  | 0.3 |  |  | — |  |  | — |
Multi-strategy investments | 17.2 |  |  | — |  |  | 17.2 |  |  | — |
Fixed-income investments | 6.2 |  |  | — |  |  | 6.2 |  |  | — |
Total assets at fair value | $ | 28.5 |  |  |  |  |  |  |
|  |  | Fair Value Measurements
| Fair Value as of |  | Quoted Market Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| August 31, 2021 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets included in the fair value hierarchy: |  |  |  |  |  |  |
Equity securities | $ | 6.8 |  |  | $ | — |  |  | $ | 6.8 |  |  | $ | — |
Short-term fixed income investments | 1.0 |  |  | 1.0 |  |  | — |  |  | — |
Multi-strategy investments | 26.9 |  |  | — |  |  | 26.9 |  |  | — |
Fixed-income investments | 7.5 |  |  | — |  |  | 7.5 |  |  | — |
Total assets at fair value | $ | 42.2 |  |  |  |  |  |  |
We do not expect to contribute to the domestic qualified plans in fiscal 2023 based on the funded status of the plans as well as current legal minimum funding requirements. We expect to contribute approximately $1.3 million during fiscal 2023 to our international defined benefit plans. These amounts are based on the total contributions required during fiscal 2023 to satisfy current legal minimum funding requirements for qualified plans and estimated benefit payments for non-qualified plans. Benefit payments are made primarily from funded benefit plan trusts. Benefit payments are expected to be paid as follows during the years ending August 31 (in millions):
| Domestic Plans |  | International Plans
2023 | $ | 12.0 |  |  | $ | 1.3 |
2024 | 12.0 |  |  | 1.3 |
2025 | 13.0 |  |  | 1.5 |
2026 | 14.6 |  |  | 1.5 |
2027 | 13.6 |  |  | 1.6 |
2028-2032 | 63.9 |  |  | 10.7 |
Multi-employer Pension Plans We have contributed to two multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of our union-represented employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects: •Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. •If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be shared by the remaining participating employers. •If a participating employer chooses to stop participating in some of its multi-employer plans, the employer may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Our contributions to these plans were $0.5 million for the year ended August 31, 2022, and $0.6 million for the years ended August 31, 2021 and 2020. Defined Contribution Plans We have defined contribution plans to which both employees and we make contributions. Employer matching amounts are allocated in accordance with the participants’ investment elections for elective deferrals and totaled $10.5 million, $8.4 million, and $8.2 million for the years ended August 31, 2022, 2021, and 2020, respectively. At August 31, 2022, assets of the domestic defined contribution plans included shares of our common stock with a market value of approximately $7.3 million, which represented approximately 1.7% of the total fair market value of the assets in our domestic defined contribution plans.

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