Note 7 – Pension Benefits

Defined Benefit Pension Plans

We and certain of our operating subsidiaries have sponsored multiple defined benefit pension plans covering union workers at certain locations. As a result of restructuring activities in recent years, at June 30, 2011 there were no active employees continuing to accrue service cost or otherwise eligible to receive plan benefits. Benefits being paid under the plans are primarily based on negotiated rates and years of service. We contribute to these plans at least the minimum amount required by regulation or contract.

At the end of the year, we discount our plan liabilities using an assumed discount rate. In estimating this rate, we, along with our third-party actuaries, review bond indices, consider yield curve analysis results and the past history of discount rates.

The actuarial present value of benefit obligations summarized below was based on the following assumption:

	2011	2010
Weighted-average assumption as of June 30
Discount rate	5.29%	5.21%

The net periodic benefit costs were determined utilizing the following beginning-of-the-year assumptions:

	2011	2010	2009
Discount rate	5.21%	6.34%	6.65%
Expected long-term return on plan assets	7.00%	8.00%	8.00%

In determining the long-term expected return on plan assets, we consider our related investment guidelines, our expectations of long-term rates of return by asset category, our target asset allocation weighting and historical rates of return and volatility for equity and fixed income investments. The investment strategy for plan assets is to control and manage investment risk through diversification among asset classes, investment managers/funds and investment styles. The plans' investment guidelines have been designed to meet the intended objective that plan assets earn at least nominal returns equal to or in excess of the plans' liability growth rate. In consideration of the current average age of the plans' participants, the investment guidelines are based upon an investment horizon of at least 10 years.

The target and actual asset allocations for our plans at June 30 by asset category are as follows:


	Target Percentage of Plan Assets at June 30	Actual Percentage of Plan Assets
	2011	2011	2010
Cash and equivalents	0-10%	1%	2%
Equity securities	30-70%	50%	54%
Fixed income	30-70%	49%	44%
Total		100%	100%

Our target asset allocations are maintained through ongoing review and periodic rebalancing of equity and fixed income investments with assistance from an independent outside investment consultant. Also, the plan assets are diversified among asset classes, asset managers or funds and investment styles to avoid concentrations of risk. We expect that a modest allocation to cash will exist within the plans, because each investment manager is likely to hold limited cash in a portfolio.

There were no plan asset investments in shares of our common stock at June 30, 2011 and 2010.

In 2010, we adopted FSP No. FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1"), which is now part of ASC Topic 715, "Compensation-Retirement Benefits." FSP FAS 132(R)-1 provides guidance on our disclosures about the plan assets of our defined benefit pension plans. FSP FAS 132(R)-1 requires us to categorize our plan assets within a three-level fair value hierarchy as follows:

Level 1 – Quoted market prices in active markets for identical assets.

Level 2 – Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs that are not corroborated by market data.

The following table summarizes the fair values and levels, within the fair value hierarchy, for our plan assets at June 30, 2011 and 2010:


	June 30, 2011
Asset Category	Level 1	Level 2	Level 3	Total
Cash and equivalents	$ 264	$ –	$ –	$ 264
Money market funds	97	–	–	97
U.S. government obligations	–	3,825	–	3,825
Corporate obligations	–	1,918	–	1,918
Mortgage obligations	–	2,562	–	2,562
Mutual funds fixed income	9,088	–	–	9,088
Mutual funds equity	17,592	–	–	17,592
Total	$ 27,041	$ 8,305	$ –	$ 35,346


	June 30, 2010
Asset Category	Level 1	Level 2	Level 3	Total
Cash and equivalents	$ 523	$ –	$ –	$ 523
Money market funds	174	–	–	174
U.S. government obligations	–	3,836	–	3,836
Corporate obligations	–	1,812	–	1,812
Mortgage obligations	–	2,262	–	2,262
Mutual funds fixed income	5,048	–	–	5,048
Mutual funds equity	16,388	–	–	16,388
Total	$ 22,133	$ 7,910	$ –	$ 30,043

The plan assets classified at Level 1 include money market funds, common stock and mutual funds. Quoted market prices in active markets for identical assets are available for investments in this category.

The plan assets classified at Level 2 include fixed income securities consisting of U.S. Government securities, corporate obligations and mortgage obligations. In valuing Level 2 assets, we apply a market or income approach utilizing a number of observable standard inputs. These inputs may be prioritized differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security on any given day.

Relevant information with respect to our pension benefits as of June 30 can be summarized as follows:

	2011	2010
Change in benefit obligation
Benefit obligation at beginning of year	$ 38,464	$ 34,484
Service cost	–	45
Interest cost	1,947	2,118
Actuarial (gain) loss	(481)	4,192
Benefits paid	(2,291)	(2,375)
Benefit obligation at end of year	$ 37,639	$ 38,464
Change in plan assets
Fair value of plan assets at beginning of year	$ 30,043	$ 27,738
Actual return on plan assets	5,802	3,878
Employer contributions	1,792	802
Benefits paid	(2,291)	(2,375)
Fair value of plan assets at end of year	$ 35,346	$ 30,043
Reconciliation of funded status
Net accrued benefit cost	$ (2,293)	$ (8,421)
Amounts recognized in the consolidated balance sheets consist of
Prepaid benefit cost (noncurrent assets)	$ 117	$ –
Accrued benefit liability (noncurrent liabilities)	(2,410)	(8,421)
Net amount recognized	$ (2,293)	$ (8,421)
Accumulated benefit obligation	$ 37,639	$ 38,464

The following table discloses, in the aggregate, those plans with benefit obligations in excess of the fair value of plan assets at the June 30 measurement date:

	2011	2010
Benefit obligations	$ 33,990	$ 38,464
Fair value of plan assets at end of year	$ 31,580	$ 30,043

Amounts recognized in accumulated other comprehensive loss at June 30 are as follows:

	2011	2010
Net actuarial loss	$ 11,945	$ 16,747
Net transition asset	(2)	(3)
Income taxes	(4,413)	(6,296)
Total	$ 7,530	$ 10,448

Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows:

			2012
	Net actuarial loss		$ 355
	Net transition asset		(1)
	Total		$ 354

The following table summarizes the components of net periodic benefit cost at June 30:

	2011	2010	2009
Components of net periodic benefit cost
Service cost	$ –	$ 45	$ 117
Interest cost	1,947	2,118	2,170
Expected return on plan assets	(2,027)	(2,150)	(2,263)
Curtailment charges	–	349	331
Amortization of unrecognized net loss	546	496	327
Amortization of prior service cost	–	5	75
Amortization of unrecognized net (asset) obligation existing at transition	(1)	(1)	2
Net periodic benefit cost	$ 465	$ 862	$ 759

In 2010, one of our plans became subject to curtailment accounting. This resulted in the immediate recognition of all of the outstanding prior service cost of the plan, which was approximately $0.3 million. This charge was included in our Specialty Foods segment.

In 2009, one of our plans became subject to curtailment accounting. This resulted in the immediate recognition of all of the outstanding prior service cost of the plan, which was approximately $0.3 million. This charge was included in our corporate expenses within continuing operations because the costs related to the retained liabilities of sold operations.

We have not yet finalized our anticipated funding level for 2012, but, based on initial estimates, we anticipate funding approximately $1.0 million.

Benefit payments estimated for future years are as follows:

	2012		$ 2,193
	2013		$ 2,196
	2014		$ 2,180
	2015		$ 2,166
	2016		$ 2,199
	2017 – 2021		$12,337