XML 43 R20.htm IDEA: XBRL DOCUMENT v3.24.3
Pension and Defined Contribution Plans
 12 Months Ended
Aug. 31, 2024
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 fixed income and equity securities.
The following tables reflect the status of our domestic (U.S.-based) and international pension plans as of the dates presented (in millions):
 Domestic PlansInternational Plans
 August 31,August 31,
 2024202320242023
Change in benefit obligation:    
Benefit obligation at beginning of year$159.8 $176.0 $34.6 $31.5 
Service cost3.6 3.8 0.9 0.8 
Interest cost7.8 7.4 2.0 1.6 
Actuarial losses (gains)3.7 (16.2)(0.1)(1.2)
Benefits paid(11.1)(11.2)(1.9)(1.9)
Other— — (1.5)3.8 
Benefit obligation at end of year163.8 159.8 34.0 34.6 
Change in plan assets:    
Fair value of plan assets at beginning of year132.7 141.5 32.1 28.5 
Actual return (loss) on plan assets9.5 (1.3)3.2 (5.2)
Employer contributions3.4 3.7 — 7.9 
Benefits paid(11.1)(11.2)(1.3)(1.9)
Other— — 0.6 2.8 
Fair value of plan assets at end of year134.5 132.7 34.6 32.1 
Funded status at the end of year$(29.3)$(27.1)$0.6 $(2.5)
Amounts recognized in the consolidated balance sheets consist of:    
Non-current assets$8.4 $10.1 $4.9 $2.3 
Current liabilities(4.2)(3.4)(0.3)(0.2)
Non-current liabilities(33.5)(33.8)(4.0)(4.6)
Net amount recognized in consolidated balance sheets$(29.3)$(27.1)$0.6 $(2.5)
Accumulated benefit obligation$162.5 $158.9 $31.8 $31.9 
Pre-tax amounts in accumulated other comprehensive loss:    
Prior service cost$(0.1)$(0.1)$— $(0.1)
Net actuarial loss(43.5)(44.3)(8.8)(13.4)
Amounts in accumulated other comprehensive loss
$(43.6)$(44.4)$(8.8)$(13.5)
Pensions plans in which benefit obligation exceeds plan assets:
Projected benefit obligation$37.7 $37.2 $4.3 $5.6 
Accumulated benefit obligation36.4 36.3 2.9 3.5 
Plan assets— — — 0.8 
Pensions plans in which plan assets exceed benefit obligation:
Projected benefit obligation$126.1 $122.6 $29.7 $29.0 
Accumulated benefit obligation126.1 122.6 28.9 28.4 
Plan assets134.5 132.7 34.6 31.3 
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 expense (income), 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 PlansInternational Plans
 202420232022202420232022
Service cost$3.6 $3.8 $4.4 $0.9 $0.8 $0.4 
Interest cost7.8 7.4 5.3 2.0 1.6 0.9 
Expected return on plan assets(6.7)(7.5)(11.2)(2.0)(2.1)(2.6)
Amortization of prior service cost0.1 2.6 2.9 — — — 
Settlement— — 0.4 — — — 
Recognized actuarial loss1.7 2.4 2.4 1.6 0.6 0.9 
Net periodic pension cost$6.5 $8.7 $4.2 $2.5 $0.9 $(0.4)
Weighted average assumptions used in computing the benefit obligation are as follows:
 Domestic PlansInternational Plans
 2024202320242023
Discount rate4.9 %5.1 %5.9 %5.9 %
Rate of compensation increase5.0 %5.0 %3.4 %3.5 %
Weighted average assumptions used in computing net periodic pension cost are as follows:
 Domestic PlansInternational Plans
 202420232022202420232022
Discount rate5.1 %4.4 %2.4 %5.9 %4.9 %1.9 %
Expected return on plan assets5.3 %5.5 %6.3 %4.7 %6.4 %6.4 %
Rate of compensation increase5.0 %5.0 %5.0 %3.5 %3.5 %3.4 %
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 $0.4 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 $1.3 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, 2024, the U.S. targeted asset allocation approximated 95% fixed income securities and 5% equity 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, 2024, the international asset target allocation approximated 93% fixed income securities and 7% multi-strategy investments.
Our pension plan asset allocation by asset category as of the dates presented is as follows:
 % of Plan Assets
Domestic PlansInternational Plans
 2024202320242023
Equity securities17.2 %18.3 %— %17.6 %
Fixed income securities77.3 %75.0 %93.2 %53.3 %
Multi-strategy investments— %— %6.8 %29.1 %
Real estate5.5 %6.7 %— %— %
Total100.0 %100.0 %100.0 %100.0 %
Domestic Plans' Assets
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 as of August 31, 2024 and August 31, 2023 are described in further detail below.
Short-term Fixed Income Investments (Level 1): Short-term investments consist of money market funds, which are valued at the daily closing price as reported by the relevant fund.
Mutual Funds (Level 1): 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.
Collective Trust (Level 2): 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.
Fixed Income Investments (Level 2): The fixed income investment seeks to maximize total return by investing primarily in a diversified portfolio of investment-grade fixed income securities, primarily publicly traded corporate bonds as well as U.S. government and municipal bonds. The investment is valued on each business day based on the values of the underlying holdings and is not actively traded.
U.S. Treasury Investments (Level 2): The domestic plans hold several fixed-income U.S. Treasury securities that are valued based on discounted future cash flows using rates currently available for debt of similar terms and maturity.
Real Estate Fund (NAV): 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, 2024(Level 1)(Level 2)(Level 3)
Assets included in the fair value hierarchy:
Fixed-income investments$63.8 $— $63.8 $— 
US Treasury investments34.4 — 34.4 — 
Mutual funds:    
Domestic large cap equity fund11.5 11.5 — — 
Foreign equity fund6.7 6.7 — — 
Collective trust: Domestic small cap equities4.9 — 4.9 — 
Short-term fixed income investments5.8 5.8 — — 
Total assets in the fair value hierarchy127.1 
Assets calculated at net asset value:
Real estate fund7.4 
Total assets at net asset value7.4 
Total assets at fair value$134.5    
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, 2023(Level 1)(Level 2)(Level 3)
Assets included in the fair value hierarchy:
Fixed-income investments$58.2 — $58.2 — 
US Treasury investments36.9 — 36.9 — 
Mutual funds:    
Domestic large cap equity fund$13.0 $13.0 $— $— 
Foreign equity fund6.5 6.5 — — 
Collective trust: Domestic small cap equities4.8 — 4.8 — 
Short-term fixed income investments4.4 4.4 — — 
Total assets in the fair value hierarchy123.8 
Assets calculated at net asset value:
Real estate fund8.9 
Total assets at net asset value8.9 
Total assets at fair value$132.7    
International Plans' 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, 2024(Level 1)(Level 2)(Level 3)
Assets included in the fair value hierarchy:
Short-term fixed income investments$0.2 $0.2 $— $— 
Multi-strategy investments2.3 — 2.3 — 
Fixed-income investments32.1 — 32.1 — 
Total assets at fair value$34.6    
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, 2023(Level 1)(Level 2)(Level 3)
Assets included in the fair value hierarchy:
Equity securities$5.2 $— $5.2 $— 
Short-term fixed income investments7.1 7.1 — — 
Multi-strategy investments11.0 — 11.0 — 
Fixed-income investments8.8 — 8.8 — 
Total assets at fair value$32.1    
We do not expect to contribute to the domestic qualified plans in fiscal 2025 based on the funded status of the plans as well as current legal minimum funding requirements. We expect to contribute approximately $0.1 million during fiscal 2025 to our international defined benefit plans. These amounts are based on the total contributions required during fiscal 2025 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 PlansInternational Plans
2025$12.7 $1.8 
202612.3 1.8 
202712.0 1.9 
202814.8 2.1 
202913.8 2.2 
2030-203462.6 14.6 
Domestic Plan Termination Approval
On March 28, 2024, the Board of Directors approved a resolution to terminate one of the qualified domestic pension plans, which is frozen and no longer accrues benefits. As of August 31, 2024, the fair value of this plan's assets exceeded its benefit obligation. The termination of the plan is effective August 31, 2024, is subject to the appropriate regulatory approvals, and is expected to be completed in fiscal 2025. The Company's ultimate settlement obligation will depend upon both the nature and timing of participant settlements and prevailing market conditions.
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 years ended August 31, 2024, 2023, and 2022.
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 $11.7 million, $11.1 million, and $10.5 million for the years ended August 31, 2024, 2023, and 2022, respectively. At August 31, 2024, assets of the domestic defined contribution plans included shares of our common stock with a market value of approximately $10.3 million, which represented approximately 1.9% of the total fair market value of the assets in our domestic defined contribution plans.