NOTE 13 – POST RETIREMENT BENEFIT PLANS

Defined Benefit Pension Plans

The Company has certain non-contributory defined benefit pension plans in the United States, Canada, Germany, the Netherlands, South Africa and the United Kingdom. The Company uses a measurement date of October 31 for fair value purposes for its pension plans. The salaried plans’ benefits are based primarily on years of service and earnings. The hourly plans’ benefits are based primarily upon years of service. Certain benefit provisions are subject to collective bargaining. The Company contributes an amount that is not less than the minimum funding and not more than the maximum tax-deductible amount to these plans. Salaried employees in the United States who commence service on or after November 1, 2007 and in various dates in the preceding five years for the non-U.S. plans will not be eligible to participate in the defined benefit pension plans, but will participate in a defined contribution retirement program. The category “Other International” represents the noncontributory defined benefit pension plans in Canada and South Africa.

Pension plan contributions by the Company totaled $14.4 million during 2013, which consisted of $13.0 million of employer contributions and $1.4 million of benefits paid directly by the Company. Pension contributions by the Company totaled $18.0 million and $32.6 million during 2012 and 2011, respectively. Contributions during 2014 are expected to be approximately $13.2 million.

The following table presents the number of participants in the defined benefit plans:


											Other
October 31, 2013	Consolidated		USA		Germany		United Kingdom		Netherlands		International
Active participants		2,244		1,880		122		133		48		61
Vested former employees		2,184		1,452		64		399		249		20
Retirees and beneficiaries		4,147		2,320		250		718		804		55
Other plan participants		35		0		0		0		35		0

October 31, 2012	Consolidated		USA		Germany		United Kingdom		Netherlands		Other Intl
Active participants		2,402		2,004		127		158		48		65
Vested former employees		3,660		2,913		63		418		249		17
Retirees and beneficiaries		4,043		2,210		248		726		804		55
Other plan participants		35		0		0		0		35		0

The actuarial assumptions are used to measure the year-end benefit obligations at October 31and the pension costs for the subsequent year were as follows:


																Other
For the year ended October 31, 2013	Consolidated			United States			Germany			United Kingdom			Netherlands			International
Discount rate		4.30	%		4.75	%		3.40	%		4.25	%		3.25	%		5.28	%
Expected return on plan assets		5.70	%		6.00	%		N/A			6.50	%		3.25	%		5.82	%
Rate of compensation increase		2.99	%		3.00	%		2.75	%		3.50	%		2.25	%		2.35	%
For the year ended October 31, 2012
Discount rate		3.92	%		4.00	%		3.50	%		4.25	%		3.25	%		4.89	%
Expected return on plan assets		6.46	%		6.75	%		N/A			6.75	%		5.00	%		6.55	%
Rate of compensation increase		2.99	%		3.00	%		2.75	%		3.50	%		2.25	%		2.29	%
For the year ended October 31, 2011
Discount rate		4.94	%		4.90	%		5.25	%		5.00	%		5.00	%		5.55	%
Expected return on plan assets		7.20	%		8.25	%		N/A			7.50	%		4.25	%		6.60	%
Rate of compensation increase		3.13	%		3.00	%		2.75	%		4.00	%		2.25	%		2.70	%

To determine the expected long-term rate of return on pension plan assets, we consider current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. In developing future return expectations for our defined benefit pension plans’ assets, we formulate views on the future economic environment, both in the U.S. and globally. We evaluate general market trends and historical relationships among a number of key variables that impact asset class returns, such as expected earnings growth, inflation, valuations, yields and spreads, using both internal and external sources. We also take into account expected volatility by asset class and diversification across classes to determine expected overall portfolio results given current and expected allocations.

Based on our analysis of future expectations of asset performance, past return results, and our current and expected asset allocations, we have assumed a 5.7% long-term expected return on those assets for cost recognition in 2013. For the defined benefit pension plans, we apply our expected rate of return to a market-related value of assets, which stabilizes variability in the amounts to which we apply that expected return.

We amortize experience gains and losses as well as the effects of changes in actuarial assumptions and plan provisions over a period no longer than the average future service of employees.

Benefit Obligations

The components of net periodic pension cost include the following (Dollars in millions):


															Other
For the year ended October 31, 2013	Consolidated			United States			Germany		United Kingdom			Netherlands			International
Service cost	$	16.7		$	11.5		$	0.6	$	2.9		$	1.2		$	0.5
Interest cost		27.6			15.9			1.2		6.5			3.3			0.7
Expected return on plan assets		(32.1	)		(16.4	)		—		(11.7	)		(3.2	)		(0.8	)
Amortization of prior service cost		0.6			0.5			—		—			—			0.1
Recognized net actuarial loss		16.4			13.6			0.6		1.3			0.6			0.3

Net periodic pension cost	$	29.2		$	25.1		$	2.4	$	(1.0	)	$	1.9		$	0.8


															Other
For the year ended October 31, 2012	Consolidated			United States			Germany		United Kingdom			Netherlands			International
Service cost	$	13.4		$	10.0		$	0.4	$	2.1		$	0.5		$	0.4
Interest cost		29.6			16.6			1.4		7.0			3.9			0.7
Expected return on plan assets		(33.9	)		(17.6	)		—		(11.8	)		(3.6	)		(0.9	)
Amortization of prior service cost		1.5			1.5			—		—			—			—
Recognized net actuarial loss		11.4			9.9			0.1		0.6			0.4			0.4

Net periodic pension cost	$	22.0		$	20.4		$	1.9	$	(2.1	)	$	1.2		$	0.6


															Other
For the year ended October 31, 2011	Consolidated			United States			Germany		United Kingdom			Netherlands			International
Service cost	$	12.7		$	9.0		$	0.5	$	2.1		$	0.7		$	0.4
Interest cost		29.6			16.6			1.4		7.1			3.9			0.6
Expected return on plan assets		(36.8	)		(19.7	)		—		(12.7	)		(3.7	)		(0.7	)
Amortization of prior service cost		1.9			1.9			—		—			—			—
Recognized net actuarial loss		8.4			7.1			0.1		0.4			0.4			0.4

Net periodic pension cost	$	15.8		$	14.9		$	2.0	$	(3.1	)	$	1.3		$	0.7

Benefit obligations are described in the following tables. Accumulated and projected benefit obligations (ABO and PBO) represent the obligations of a pension plan for past service as of the measurement date. ABO is the present value of benefits earned to date with benefits computed based on current compensation levels. PBO is ABO increased to reflect expected future compensation.

The following table sets forth the plans’ change in projected benefit obligation (Dollars in millions):


																Other
	Consolidated			USA			Germany			United Kingdom			Netherlands			International
For the year ended October 31, 2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	722.4		$	404.7		$	35.3		$	161.9		$	103.4		$	17.1
Service cost		16.7			11.5			0.6			2.9			1.2			0.5
Interest cost		27.6			15.9			1.2			6.5			3.3			0.7
Plan participant contributions		0.3			—			—			—			0.3			—
Expenses paid from assets		(2.2	)		(1.9	)		—			—			—			(0.3	)
Plan Amendments		0.4			0.4			—			—			—			—
Actuarial (gain) loss		(23.8	)		(40.6	)		0.9			9.7			7.7			(1.5	)
Foreign currency effect		9.4			—			2.4			0.8			7.0			(0.8	)
Benefits paid		(47.0	)		(31.3	)		(1.4	)		(6.9	)		(6.0	)		(1.4	)

Benefit obligation at end of year	$	703.8		$	358.7		$	39.0		$	174.9		$	116.9		$	14.3

For the year ended October 31, 2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	616.2		$	345.5		$	27.9		$	142.1		$	85.3		$	15.4
Service cost		13.4			10.0			0.4			2.1			0.5			0.4
Interest cost		29.6			16.6			1.4			7.0			3.9			0.7
Plan participant contributions		0.3			—			—			0.1			0.2			—
Expenses paid from assets		(1.1	)		(1.1	)		—			—			—			—
Multi-plan combination		1.7			—			—			1.7			—			—
Actuarial loss		91.9			47.3			8.4			11.4			24.0			0.8
Foreign currency effect		(1.7	)		—			(1.5	)		3.9			(4.5	)		0.4
Benefits paid		(27.9	)		(13.6	)		(1.3	)		(6.4	)		(6.0	)		(0.6	)

Benefit obligation at end of year	$	722.4		$	404.7		$	35.3		$	161.9		$	103.4		$	17.1

The following tables set forth the PBO, ABO, plan assets and instances where the ABO exceeds the plan assets for the respective years (Dollars in millions):


											Other
	Consolidated		USA		Germany		United Kingdom		Netherlands		International
Actuarial value of benefit obligations
October 31, 2013
Projected benefit obligation	$	703.8	$	358.7	$	39.0	$	174.9	$	116.9	$	14.3
Accumulated benefit obligation		674.4		339.1		35.9		171.3		115.2		12.9
Plan assets		621.2		301.8		—		198.9		106.5		14.0
October 31, 2012
Projected benefit obligation	$	722.4	$	404.7	$	35.3	$	161.9	$	103.4	$	17.1
Accumulated benefit obligation		687.8		382.0		32.5		156.6		102.0		14.7
Plan assets		599.1		298.4		—		187.4		99.3		14.0
Plans with ABO in excess of Plan assets
October 31, 2013
Accumulated benefit obligation	$	503.0	$	339.1	$	35.9	$	—	$	115.2	$	12.8
Plan assets		419.2		301.8		—		—		106.5		10.9
October 31, 2012
Accumulated benefit obligation	$	531.2	$	382.0	$	32.5	$	—	$	102.0	$	14.7
Plan assets		408.3		298.4		—		—		99.3		10.6

Future benefit payments, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are as follows (Dollars in millions):


Year	Expected benefit payments
2014	$	32.7
2015	$	33.2
2016	$	33.9
2017	$	35.2
2018	$	37.0
2019-2023	$	205.0

Plan assets

The plans’ assets consist of domestic and foreign equity securities, government and corporate bonds, cash, insurance annuity mutual funds and not more than the allowable number of shares of the Company’s common stock, which was 247,504 Class A shares and 160,710 Class B shares at October 31, 2013 and 2012.

The investment policy reflects the long-term nature of the plans’ funding obligations. The assets are invested to provide the opportunity for both income and growth of principal. This objective is pursued as a long-term goal designed to provide required benefits for participants without undue risk. It is expected that this objective can be achieved through a well-diversified asset portfolio. All equity investments are made within the guidelines of quality, marketability and diversification mandated by the Employee Retirement Income Security Act and/or other relevant statutes. Investment managers are directed to maintain equity portfolios at a risk level approximately equivalent to that of the specific benchmark established for that portfolio.

The Company’s weighted average asset allocations at the measurement date and the target asset allocations by category are as follows:


	2013			2013			2012			2012
Asset Category	Target			Actual			Target			Actual
Equity securities		23	%		31	%		34	%		34	%
Debt securities		49	%		46	%		45	%		45	%
Other		28	%		23	%		21	%		21	%

Total		100	%		100	%		100	%		100	%

The fair value of the pension plans’ investments is presented below. The inputs and valuation techniques used to measure the fair value of the assets are consistently applied and described in Note 1.


															Other
	Consolidated			USA			Germany		United Kingdom			Netherlands			International
For the year ended October 31, 2013
Change in plan assets:
Fair value of plan assets at beginning of year	$	599.1		$	298.4		$	—	$	187.4		$	99.3		$	14.0
Actual return on plan assets		48.9			25.1			—		15.9			6.5			1.4
Expenses paid		(2.1	)		(1.8	)		—		—			—			(0.3	)
Plan participant contributions		0.3			—			—		—			0.3			—
Multi-plan combination		—			—			—		—			—			—
Foreign currency impact		6.4			—			—		0.8			6.5			(0.9	)
Employer contributions		14.4			11.4			—		1.7			—			1.3
Benefits paid		(45.8	)		(31.3	)		—		(6.9	)		(6.1	)		(1.5	)

Fair value of plan assets at end of year	$	621.2		$	301.8		$	—	$	198.9		$	106.5		$	14.0

For the year ended October 31, 2012
Change in plan assets:
Fair value of plan assets at beginning of year	$	540.3		$	263.0		$	—	$	176.7		$	87.9		$	12.7
Actual return on plan assets		66.2			35.3			—		8.6			21.9			0.4
Expenses paid		(1.1	)		(1.1	)		—		—			—			—
Plan participant contributions		0.3			—			—		0.1			0.2			—
Multi-plan combination		1.7			—			—		1.7			—			—
Foreign currency effects		(0.2	)		—			—		4.5			(4.7	)		—
Employer contributions		18.0			14.3			—		2.2			—			1.5
Benefits paid		(26.1	)		(13.1	)		—		(6.4	)		(6.0	)		(0.6	)

Fair value of plan assets at end of year	$	599.1		$	298.4		$	—	$	187.4		$	99.3		$	14.0

The following table presents the fair value measurements for the pension assets:

As of October 31, 2013 (Dollars in millions)


Asset Category	Fair Value Measurement
	Level 1		Level 2		Level 3		Total
Equity securities	$	146.3	$	46.1	$	—	$	192.4
Fixed income		155.1		112.6		—		267.7
Debt securities		—		19.3		—		19.3
Insurance annuity		—		—		106.5		106.5
Other		2.9		32.4		—		35.3

Total	$	304.3	$	210.4	$	106.5	$	621.2

As of October 31, 2012 (Dollars in millions)


Asset Category	Fair Value Measurement
	Level 1		Level 2		Level 3		Total
Equity securities	$	7.7	$	216.3	$	—	$	224.0
Fixed income		89.0		99.3		—		188.3
Debt securities		—		56.8		—		56.8
Insurance annuity		—		—		99.3		99.3
Other		15.1		15.6		—		30.7

Total	$	111.8	$	388.0	$	99.3	$	599.1

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3). There have been no transfers in or out of level 3:


	Non-U.S. Pension Plan
(Dollars in millions)	2013			2012
Balance at beginning of year	$	99.3		$	87.9
Actual return on plan assets held at reporting date:
Assets still held at reporting date		6.5			21.9
Plan participant contributions		0.3			0.2
Settlements		(6.1	)		(6.0	)
Currency impact		6.5			(4.7	)

Balance at end of year	$	106.5		$	99.3

Financial statement presentation including other comprehensive income:


																Other
As of October 31, 2013	Consolidated			USA			Germany			United Kingdom			Netherlands			International
Unrecognized net actuarial loss	$	148.5		$	77.8		$	13.1		$	30.4		$	22.8		$	4.4
Unrecognized prior service cost		0.8			0.8			—			—			—			—
Unrecognized initial net obligation		0.3			—			—			—			—			0.3

Accumulated other comprehensive loss	$	149.6		$	78.6		$	13.1		$	30.4		$	22.8		$	4.7

Amounts recognized in the Consolidated Balance Sheets consist of:
Prepaid benefit cost	$	29.6		$	—		$	—		$	26.6		$	—		$	3.0
Accrued benefit liability		(112.1	)		(56.9	)		(39.0	)		(2.5	)		(10.4	)		(3.3	)
Accumulated other comprehensive loss		149.6			78.6			13.1			30.4			22.8			4.7

Net amount recognized	$	67.1		$	21.7		$	(25.9	)	$	54.5		$	12.4		$	4.4


															Other
As of October 31, 2012	Consolidated			USA			Germany			United Kingdom		Netherlands			International
Unrecognized net actuarial loss	$	203.5		$	140.9		$	12.0		$	26.0	$	17.6		$	7.0
Unrecognized prior service cost		0.9			0.9			—			—		—			—
Unrecognized initial net obligation		0.4			—			—			—		—			0.4

Accumulated other comprehensive loss	$	204.8		$	141.8		$	12.0		$	26.0	$	17.6		$	7.4

Amounts recognized in the Consolidated Balance Sheets consist of:
Prepaid benefit cost	$	28.8		$	—		$	—		$	25.6	$	—		$	3.2
Accrued benefit liability		(152.1	)		(106.3	)		(35.3	)		—		(4.1	)		(6.4	)
Accumulated other comprehensive loss		204.8			141.8			12.0			26.0		17.6			7.4

Net amount recognized	$	81.5		$	35.5		$	(23.3	)	$	51.6	$	13.5		$	4.2


	October 31, 2013			October 31, 2012
Accumulated other comprehensive loss at beginning of year	$	204.8		$	158.6
Increase or (decrease) in accumulated other comprehensive (income) or loss
Net transition obligation amortized during fiscal year		(0.1	)		(0.1	)
Net prior service costs amortized during fiscal year		(0.5	)		(1.5	)
Net loss amortzied during fiscal year		(16.4	)		(11.3	)
Prior service (cost) or credit recognized during fiscal year due to curtailment		—			(2.3	)
Prior service costs occuring during fiscal year		0.4			—
Liability (gain) loss occuring during fiscal year		(23.9	)		92.0
Asset (gain) occuring during fiscal year		(16.9	)		(30.7	)

Increase (decrease) in accumulated other comprehensive loss	$	(57.4	)	$	46.1
Foreign currency impact		2.2			0.1

Accumulated other comprehensive (income) or loss at current fiscal year end	$	149.6		$	204.8

In 2014, the Company expects to record an amortization loss of $10.4 million of prior service costs from shareholders’ equity into pension costs.

Defined contribution plans

The Company has several voluntary 401(k) savings plans that cover eligible employees. For certain plans, the Company matches a percentage of each employee’s contribution up to a maximum percentage of base salary. Company contributions to the 401(k) plans were $6.5 million in 2013, $3.9 million in 2012 and $3.6 million in 2011.

Supplemental Employee Retirement Plan

The Company has a supplemental employee retirement plan which is an unfunded plan providing supplementary retirement benefits primarily to certain executives and longer-service employees.

Postretirement Health Care and Life Insurance Benefits

The Company has certain postretirement health and life insurance benefit plans in the United States and South Africa. The Company uses a measurement date of October 31 for its postretirement benefit plans.

The following table presents the number of participants in the post-retirement health and life insurance benefit plans:


October 31, 2013	Consolidated		USA		South Africa
Active participants		26		12		14
Vested former employees		0		0		0
Retirees and beneficiaries		894		793		101
Other plan participants		0		0		0

October 31, 2012	Consolidated		USA		South Africa
Active participants		31		12		19
Vested former employees		0		0		0
Retirees and beneficiaries		916		812		104
Other plan participants		0		0		0

The discount rate actuarial assumptions at October 31 are used to measure the year-end benefit obligations and the pension costs for the subsequent year were as follows:


	Consolidated			United States			South Africa
For the year ended October 31, 2013		4.67	%		3.95	%		8.10	%
For the year ended October 31, 2012		4.77	%		4.00	%		7.75	%

The components of net periodic cost for the postretirement benefits include the following (Dollars in millions):


For the years ended October 31,	2013			2012			2011
Service cost	$	—		$	—		$	—
Interest cost		0.8			1.1			1.2
Amortization of prior service cost		(1.5	)		(1.6	)		(1.6	)
Recognized net actuarial gain		—			—			(0.1	)

Net periodic income	$	(0.7	)	$	(0.5	)	$	(0.5	)

The following table sets forth the plans’ change in benefit obligation (Dollars in millions):


	October 31, 2013			October 31, 2012
Benefit obligation at beginning of year	$	19.3		$	20.8
Service cost		—			—
Interest cost		0.8			1.0
Actuarial loss		0.4			0.2
Foreign currency effect		(0.5	)		(0.3	)
Plan amendments		—			—
Benefits paid		(1.5	)		(2.4	)

Benefit obligation at end of year	$	18.5		$	19.3

Financial statement presentation included other comprehensive income (Dollars in millions):


	October 31, 2013		October 31, 2012
Unrecognized net actuarial gain	$	0.5	$	0.9
Unrecognized prior service credit		9.0		10.7

Accumulated other comprehensive income	$	9.5	$	11.6

The accumulated postretirement health and life insurance benefit obligation and fair value of plan assets for the consolidated plans were $18.5 million and $0, respectively, as of October 31, 2013 compared to $19.3 million and $0, respectively, as of October 31, 2012.

The healthcare cost trend rates on gross eligible charges are as follows:


	Medical
Current trend rate		7.6	%
Ultimate trend rate		5.2	%
Year ultimate trend rate reached		2026

A one-percentage point change in assumed health care cost trend rates would have the following effects (Dollars in thousands):


	1-Percentage-Point Increase		1-Percentage-Point Decrease
Effect on total of service and interest cost components	$	42	$	(35	)
Effect on postretirement benefit obligation	$	523	$	(446	)

Future benefit payments, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are as follows (Dollars in millions):


Year	Expected benefit payments
2014	$	2.2
2015	$	1.8
2016	$	1.7
2017	$	1.6
2018	$	1.5
2019-2023	$	6.4