Pension and Other Postretirement Benefits (Tables)

12 Months Ended

Jun. 30, 2018

Funded Status of Pension Plans and Amount recognized in the Consolidated Balance Sheet

The funded status of our pension plans and amounts recognized in the consolidated balance sheets as of June 30 were as follows:



(in thousands)	2018			2017
Change in benefit obligation:
Benefit obligation, beginning of year	$	941,094		$	1,005,368
Service cost	1,635			2,908
Interest cost	30,751			31,113
Participant contributions	3			8
Actuarial gains	(24,501		)	(19,660		)
Benefits and expenses paid	(47,212		)	(70,257		)
Currency translation adjustments	3,876			(1,045		)
Special termination benefits	—			98
Plan settlements	(2,935		)	(7,439		)
Benefit obligation, end of year	$	902,711		$	941,094
Change in plans' assets:
Fair value of plans' assets, beginning of year	$	808,635		$	821,675
Actual return on plans' assets	24,931			56,818
Company contributions	7,999			11,960
Participant contributions	3			8
Plan settlements	(2,935		)	(7,439		)
Benefits and expenses paid	(47,212		)	(70,257		)
Currency translation adjustments	1,337			(4,130		)
Fair value of plans' assets, end of year	$	792,758		$	808,635
Funded status of plans	$	(109,953	)	$	(132,459	)
Amounts recognized in the balance sheet consist of:
Long-term prepaid benefit	$	42,543		$	17,208
Short-term accrued benefit obligation	(6,699		)	(5,713		)
Accrued pension benefits	(145,797		)	(143,954		)
Net amount recognized	$	(109,953	)	$	(132,459	)

Defined Benefit Pension Plans Recognized in Accumulated Other Comprehensive (Loss) Income

The pre-tax amounts related to our defined benefit pension plans recognized in accumulated other comprehensive loss were as follows at June 30:



(in thousands)	2018		2017
Unrecognized net actuarial losses	$	247,230	$	246,428
Unrecognized net prior service credits	723		580
Unrecognized transition obligations	539		622
Total	$	248,492	$	247,630

The pre-tax amounts related to our other postretirement benefit plans which were recognized in accumulated other comprehensive loss were as follows at June 30:



(in thousands)	2018			2017
Unrecognized net actuarial losses	$	4,662		$	5,266
Unrecognized net prior service credits	(1,041		)	(128		)
Total	$	3,621		$	5,138

Accumulated Benefit Obligations Exceeding Plan Assets Fair Value

Included in the above information are plans with accumulated benefit obligations exceeding the fair value of plan assets as of June 30 as follows:



(in thousands)	2018		2017
Projected benefit obligation	$	152,485	$	156,816
Accumulated benefit obligation	151,871		156,590
Fair value of plan assets	—		7,083

Net Periodic Pension (Income) Cost

The components of net periodic pension income include the following as of June 30:



(in thousands)	2018			2017			2016
Service cost	$	1,635		$	2,908		$	4,640
Interest cost	30,751			31,113			37,726
Expected return on plans' assets	(56,579		)	(58,781		)	(58,523		)
Amortization of transition obligation	94			89			80
Amortization of prior service cost	48			(452		)	(417		)
Special termination benefit charge	—			98			334
Settlement loss	626			379			227
Recognition of actuarial losses	6,907			8,356			7,286
Net periodic pension income	$	(16,518	)	$	(16,290	)	$	(8,647	)

Funded Status of Other Postretirement Benefit Plans and Amount Recognized in the Consolidated Balance Sheet

The funded status of our other postretirement benefit plans and the related amounts recognized in the consolidated balance sheets were as follows:



(in thousands)	2018			2017
Change in benefit obligation:
Benefit obligation, beginning of year	$	18,160		$	20,542
Interest cost	629			673
Actuarial losses	(323		)	(747		)
Benefits paid	(2,208		)	(2,308		)
Plan amendments	(935		)	—
Benefit obligation, end of year	$	15,323		$	18,160
Funded status of plan	$	(15,323	)	$	(18,160	)
Amounts recognized in the balance sheet consist of:
Short-term accrued benefit obligation	$	(1,598	)	$	(1,254	)
Accrued postretirement benefits	(13,725		)	(16,906		)
Net amount recognized	$	(15,323	)	$	(18,160	)

Net Periodic Other Postretirement Costs (Benefit)

The components of net periodic other postretirement benefit cost include the following for the years ended June 30:



(in thousands)	2018			2017			2016
Interest cost	629			673			840
Amortization of prior service credit	(22		)	(22		)	(22		)
Recognition of actuarial loss	280			355			324
Net periodic other postretirement benefit cost	$	887		$	1,006		$	1,142

Significant Actuarial Assumptions Used to Determine the Present Value of Net Benefit Obligations

The significant actuarial assumptions used to determine the present value of net benefit obligations for our defined benefit pension plans and other postretirement benefit plans were as follows:



	2018		2017		2016
Discount Rate:
U.S. plans	4.0-4.3%		3.3-3.9%		2.4-3.7%
International plans	1.8-3.3%		2.0-3.3%		0.9-3.2%
Rates of future salary increases:
U.S. plans	4.0	%	4.0	%	3.0-4.0%
International plans	2.5-3.0%		2.5-3.0%		2.5-3.0%

The significant assumptions used to determine the net periodic (income) cost for our pension and other postretirement benefit plans were as follows:



	2018		2017		2016
Discount Rate:
U.S. plans	3.3-3.9%		2.4-3.7%		3.2-4.5%
International plans	2.0-3.3%		0.9-3.2%		2.3-3.8%
Rates of future salary increases:
U.S. plans	4.0	%	3.0-4.0%		3.0-4.0%
International plans	2.5-3.0%		2.5-3.0%		2.5-3.0%
Rate of return on plans assets:
U.S. plans	7.3	%	7.5	%	7.5	%
International plans	5.3	%	5.3-5.5%		5.3-5.5%

Annual Assumed Rate of Increase in Per Capita Cost of Covered Benefits for Postretirement Benefit Plans

The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for our postretirement benefit plans was as follows:



	2018		2017		2016
Health care costs trend rate assumed for next year	7.5	%	8.0	%	8.5	%
Rate to which the cost trend rate gradually declines	5.0	%	5.0	%	5.0	%
Year that the rate reaches the rate at which it is assumed to remain	2027		2027		2027

Calculated Effect of Change on Assumption Used to Calculate Interest Cost Components and Obligations of Healthcare Plans

A change of one percentage point in the assumed health care cost trend rates would have the following effects on the total service and interest cost components of our other postretirement cost and other postretirement benefit obligation at June 30, 2018:



(in thousands)	1% Increase		1% Decrease
Effect on total service and interest cost components	$	27	$	(24	)
Effect on other postretirement obligation	492		(437		)

Asset Allocations and Target Allocations by Asset Class

The following table presents the fair value of the benefit plan assets by asset category as of June 30, 2018:



(in thousands)	Level 1		Level 2		Level 3		NAV⁽³⁾		Total
Common / collective trusts ⁽³⁾:
Value funds	$	—	$	—	$	—	$	74,070	$	74,070
Growth funds	—		—		—		49,438		49,438
Balanced funds	—		—		—		11,854		11,854
Corporate fixed income securities	—		350,394		—		—		350,394
Common stock	83,361		—		—		—		83,361
Government securities:
U.S. government securities	—		62,381		—		—		62,381
Foreign government securities	—		46,286		—		—		46,286
Other fixed income securities	—		31,630		—		—		31,630
Other	3,898		79,446		—		—		83,344
Total investments	$	87,259	$	570,137	$	—	$	135,362	$	792,758

The following table presents the fair value of the benefit plan assets by asset category as of June 30, 2017:



(in thousands)	Level 1		Level 2		Level 3		NAV⁽³⁾		Total
Common / collective trusts ⁽³⁾:
Value funds	$	—	$	—	$	—	$	76,186	$	76,186
Growth funds	—		—		—		43,880		43,880
Balanced funds	—		—		—		12,421		12,421
Corporate fixed income securities	—		365,723		—		—		365,723
Common stock	85,138		—		—		—		85,138
Government securities:
U.S. government securities	—		72,817		—		—		72,817
Foreign government securities	—		45,359		—		—		45,359
Other fixed income securities	—		25,761		—		—		25,761
Other	3,313		78,037		—		—		81,350
Total investments	$	88,451	$	587,697	$	—	132,487		$	808,635

⁽³⁾Investments in common / collective trusts invest primarily in publicly traded securities and are valued using net asset value (NAV) of units of a bank collective trust. Therefore, these amounts have not been classified in the fair value hierarchy and are presented in the tables to reconcile the fair value hierarchy to the total fair value of plan assets.

Our defined benefit pension plans’ asset allocations as of June 30, 2018 and 2017 and target allocations for 2019, by asset class, were as follows:



	2018		2017		Target %
Equity	28	%	27	%	24	%
Fixed Income	62		63		69
Other	11		10		7