NOTE 11 – PENSIONS AND OTHER POST-RETIREMENT BENEFITS

Savings and Retirement Plan: We sponsor a Savings and Retirement Plan for substantially all of our U.S. employees. Under the Plan, we match employee contributions up to a maximum of 3% of employees' compensation. In addition to matching employees' contributions throughout the year, there is a year-end contribution that can range from 4% to 13% of eligible employees' pay as defined in the Plan. U.S. employees who are not eligible for the Savings and Retirement Plan have the option to participate in a separate 401(k) Employee Stock Ownership Plan. We match employee contributions made by participants in that plan up to a maximum of 3% of employees' compensation. In addition to matching employees' contributions throughout the year, there is a discretionary year-end matching contribution that can range from 0-3%. Employer contributions to the Plans totaled $25,609, $27,629, and $31,060 for 2013, 2012, and 2011, respectively.

Executive Retirement Plans: We have Supplemental Executive Retirement Plans (SERPs) to provide retirement, death and disability benefits to a limited number of former employees. Annual benefits under the SERPs are based on years of service and individual compensation near retirement.

Pension and Post-Retirement Medical Plans: We sponsor several defined benefit pension plans for certain hourly and salaried employees. The benefits for most of these plans are generally based on stated amounts for each year of service. We fund the plans in amounts consistent with the limits of allowable tax deductions. During fiscal year 2013, we made contributions of approximately $3,490 to our pension plans. We also sponsor a post-retirement medical plan that provides subsidized medical benefits for eligible retired employees and their eligible dependents. The plan changed on January 1, 2009 to eliminate the subsidy for future retirees with the exception of a small group of employees near retirement that will still be eligible for the subsidized coverage at retirement. A 1% increase in the medical trend rates would not have a material effect on post-retirement medical expense or the post-retirement benefit obligation. For the fiscal year ending October 31, 2014, we expect our total contributions to our funded pension plans, unfunded pension, non-qualified plans and post-retirement medical plans to be at least $4,370.

The cost of pension and post-retirement medical benefits recognized in the Consolidated Statement of Operations is as follows:


	Pension
		2013			2012			2011
Service cost	$	4,846		$	4,185		$	4,496
Interest cost		13,203			14,077			14,691
Expected return on plan assets		(19,699	)		(19,379	)		(17,625	)
Amortization of prior service cost		448			435			397
Recognized actuarial loss		9,577			6,865			6,055
Settlement gain		(110	)		(35	)		(16	)
Curtailment		—			—			—
Net Periodic Benefit Cost	$	8,265		$	6,148		$	7,998


	Post-Retirement Medical
		2013			2012			2011
Service cost	$	238		$	124		$	188
Interest cost		360			448			510
Expected return on plan assets		N/A			N/A			N/A
Amortization of prior service cost		(128	)		(128	)		(128	)
Recognized actuarial loss		469			471			304
Net Periodic Benefit Cost	$	939		$	915		$	874

The plans' funded status is shown below, along with a description of how the status changed during the past two years. The benefit obligation is the projected benefit obligation—the actuarial present value, as of a date, of all benefits attributed by the pension benefit formula to employee service rendered prior to that date.


	Pension						Post-Retirement Medical
Change in Benefit Obligation		2013			2012			2013			2012
Benefit obligation beginning of year	$	327,859		$	278,152		$	9,544		$	9,467
Service cost		4,846			4,185			238			124
Interest cost		13,203			14,077			360			448
Plan participants' contributions		677			735			—			—
Plan amendments		470			223			—			—
Actuarial loss/(gain)		(17,004	)		43,055			(757	)		816
Benefits paid		(14,815	)		(14,385	)		(836	)		(1,311	)
Expenses paid from assets		(143	)		(290	)		—			—
Currency impact		440			1,226			—			—
Acquisition		4,437			—			—			—
Curtailments		(3,873	)		—			—			—
Other		—			881			—			—
Benefit Obligation at End of Year	$	316,097		$	327,859		$	8,549		$	9,544


	Pension						Post-Retirement Medical
Change in Plan Assets		2013			2012			2013			2012
Fair value of plan assets at beginning of year	$	279,238		$	237,658		$	—		$	—
Actual return on plan assets		34,227			36,543			—			—
Employer contributions		3,490			16,095			836			1,311
Plan participants' contributions		677			735			—			—
Benefit payments		(14,815	)		(14,385	)		(836	)		(1,311	)
Expenses paid from assets		(143	)		(290	)		—			—
Currency impact		(742	)		2,001			—			—
Other		—			881			—			—
Fair Value of Assets at End of Year	$	301,932		$	279,238		$	—		$	—


	Pension						Post-Retirement Medical
Funded Status		2013			2012			2013			2012
Projected benefit obligation	$	(316,097	)	$	(327,859	)	$	(8,549	)	$	(9,544	)
Plan assets at fair value		301,932			279,238			—			—
Net Funded Status – Over / (Under)	$	(14,165	)	$	(48,621	)	$	(8,549	)	$	(9,544	)
Funded status – overfunded plans	$	14,572		$	686		$	—		$	—
Funded status – underfunded plans		(28,737	)		(49,307	)		(8,549	)		(9,544	)


	Pension						Post-Retirement Medical
Amounts Recognized in Balance Sheet		2013			2012			2013			2012
Noncurrent assets	$	14,572		$	686		$	—		$	—
Current liabilities		(491	)		(455	)		(987	)		(1,058	)
Noncurrent liabilities		(28,246	)		(48,852	)		(7,562	)		(8,486	)


	Pension				Post-Retirement Medical
Amounts in Accumulated Other Comprehensive Income		2013		2012		2013			2012
Net (gain) loss	$	100,181	$	144,613	$	4,146		$	5,372
Net prior service cost (credit)		4,813		4,779		(439	)		(567	)
Other Comprehensive (Income) Loss – Total	$	104,994	$	149,392	$	3,707		$	4,805


	Pension				Post-Retirement Medical
Amortization Expense Expected to Be Recognized During Next
Fiscal Year		2013		2012		2013			2012
Prior service cost (credits)	$	480	$	448	$	(128	)	$	(128	)
Net loss		6,168		9,828		369			469

Our pension and post-retirement medical plans with accumulated benefit obligations in excess of plan assets were as follows:


	Pension				Post-Retirement Medical
		2013		2012		2013		2012
Projected / accumulated post-retirement benefit obligation	$	93,298	$	265,706	$	8,549	$	9,544
Accumulated benefit obligation		88,765		256,936		N/A		N/A
Fair value of plan assets		64,561		219,245		N/A		N/A

Our pension and post-retirement medical plans with projected benefit obligations in excess of plan assets were as follows:


	Pension				Post-Retirement Medical
		2013		2012	2013	2012
Projected benefit obligation	$	93,298	$	314,414	N/A	N/A
Accumulated benefit obligation		88,765		301,706	N/A	N/A
Fair value of plan assets		64,561		265,107	N/A	N/A

Our pension and post-retirement medical plans with projected benefit obligations less than plan assets were as follows:


	Pension				Post-Retirement Medical
		2013		2012	2013	2012
Projected benefit obligation	$	222,798	$	13,445	N/A	N/A
Accumulated benefit obligation		219,155		12,421	N/A	N/A
Fair value of plan assets		237,371		14,131	N/A	N/A

Actuarial Assumptions: We determine our actuarial assumptions on an annual basis. These assumptions are weighted to reflect each country having requirements that may impact the cost of providing retirement benefits. We employ a total return investment approach for the domestic and foreign pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return on plan assets for a prudent level of risk. In determining the expected long-term rate of return, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies.


	Pension		Post-Retirement Medical
Assumption ranges used in net periodic benefit cost	2013	2012	2013		2012
Discount rate	3.00% – 4.75%	4.25% – 5.50%	4.00	%	5.00	%
Expected long-term return on plan assets	3.75% – 7.75%	5.50% – 8.00%	N/A		N/A
Average increase in compensation	2.25% – 3.75%	2.25% – 4.00%	N/A		N/A
Initial medical trend rate	N/A	N/A	8.00	%	8.50	%
Ultimate medical trend rate	N/A	N/A	5.00	%	5.00	%
Years to ultimate rate	N/A	N/A	6 Years		7 Years


	Pension		Post-Retirement Medical
Assumption ranges used to determine benefit obligation	2013	2012	2013		2012
Discount rate	3.00% – 5.00%	3.00% – 4.75%	4.75	%	4.00	%
Rate of compensation increase	2.25% – 3.25%	2.25% – 3.75%	N/A		N/A
Initial medical trend rate	N/A	N/A	7.50	%	8.00	%
Ultimate medical trend rate	N/A	N/A	5.00	%	5.00	%
Years to ultimate rate	N/A	N/A	5 Years		6 Years

Investment Strategy: We have a master trust that holds the assets for all our U.S. pension plans. For investment purposes, the plans are managed in an identical way, as their objectives are similar. The Benefit Funds Investment Committee (Committee), along with assistance from external consultants, sets investment guidelines and makes asset allocation decisions, based on market conditions, risk tolerance, funding requirements and expected benefit payments. The Committee also oversees the selection of investment managers and monitors asset performance. As pension liabilities are long-term in nature, the Committee employs a long-term rate of return on plan assets approach for a prudent level of risk. Historical returns are considered as well as advice from investment experts. Annually, the Committee and the consultants review the risk versus the return of the investment portfolio to assess the long-term rate of return assumption.

The U.S. investment portfolio contains a diversified portfolio of investment categories, including domestic and international equities and short and long-term fixed income securities. Among the equity investments there is also diversity of style, growth versus value. Plan assets did not include investments in our stock as of the reported dates. The Committee believes with prudent risk tolerance and asset diversification, the plans should be able to meet their pension obligations in the future.

The weighted average asset allocations for the past two fiscal years by asset category are as follows:


	Pension Plans
					Target
Asset Allocation	2013		2012		Allocation
Equity securities	56	%	56	%	50– 60%
Debt securities	37	%	38	%	40– 50%
Other	7	%	6	%	0%
Total	100	%	100	%	100%

The following tables provide information on the fair value of pension plan assets. See Note 7 for more information on fair value measurements.


		Fair Value at	Fair Value Measurements Using Inputs Considered as
		October 25, 2013		Level 1		Level 2		Level 3
Domestic Equity Securities
Commingled Trust	$	71,410	$	—	$	71,410	$	—
Mutual Fund		29,378		29,378		—		—
International Equity Securities
Mutual Funds		68,374		33,659		34,715		—
Total Equity Securities		169,162		63,037		106,125		—
Domestic Fixed Income
Mutual Funds		86,587		86,587		—		—
International Fixed Income
Debt Securities		3,974		—		3,974		—
Mutual Funds		19,739		—		19,739		—
Total Fixed Income		110,300		86,587		23,713		—
Other Investments
Insurance Contracts		14,456		—		—		14,456
Cash		5,458		5,458		—		—
Real Estate		2,556		—		2,056		500
Total Other Investments		22,470		5,458		2,056		14,956
Total	$	301,932	$	155,082	$	131,894	$	14,956


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		October 26, 2012		Level 1		Level 2		Level 3
Domestic Equity Securities
Corporate Stocks	$	25,050	$	25,050	$	—	$	—
Commingled Trust		66,692		—		66,692		—
International Equity Securities
Mutual Funds		65,578		—		65,578		—
Total Equity Securities		157,320		25,050		132,270		—
Domestic Fixed Income
Mutual Funds		83,467		—		83,467		—
International Fixed Income
Debt Securities		4,211		—		4,211		—
Mutual Funds		18,110		—		18,110		—
Total Fixed Income		105,788		—		105,788		—
Other Investments
Insurance Contracts		12,385		—		—		12,385
Cash		1,988		1,988		—		—
Real Estate		1,757		—		1,172		585
Total Other Investments		16,130		1,988		1,172		12,970
Total	$	279,238	$	27,038	$	239,230	$	12,970

Pension plan investments in corporate stocks and mutual funds are classified as Level 1 investments within the fair value hierarchy, as determined by quoted market prices. Pension plan investments in mutual funds that are not exchange-traded, and commingled trusts, and certain other investments are classified as Level 2 investments within the fair value hierarchy. These investments are valued at net asset value based on the underlying securities, as determined by the sponsor. Level 3 investments are primarily related to insurance contracts required in certain foreign-based plans. The fair value is determined based on the expected benefits to be paid under the contract, discounted at a rate consistent with the related benefit obligation. There were no transfers between levels for all periods presented.

Investment securities, in general, are exposed to various risks such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported. The valuation methods previously described above may produce a fair value calculation that may not be indicative of net realized value or reflective of future fair values.

The following table provides a reconciliation of the beginning and ending balances of pension assets measured at fair value that used significant unobservable inputs (Level 3):


		Total			U.S.			Non-U.S.
Balance, October 28, 2011	$	7,716		$	500		$	7,216
Actual return on plan assets
Relating to assets still held at reporting date		3,474			85			3,389
Purchases		2,279			—			2,279
Settlements		(82	)		—			(82	)
Transfers in and/or out of Level 3		—			—			—
Currency impact		(417	)		—			(417	)
Balance, October 26, 2012	$	12,970		$	585		$	12,385
Actual return on plan assets
Relating to assets still held at reporting date		212			(85	)		297
Purchases		1,215			—			1,215
Settlements		(97	)		—			(97	)
Transfers in and/or out of Level 3		—			—			—
Currency impact		656			—			656
Balance, October 25, 2013	$	14,956		$	500		$	14,456

Estimated Future Benefits: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:


				Post-retirement
		Pension		Medical
2014	$	16,774	$	1,011
2015		15,815		952
2016		15,753		852
2017		16,407		774
2018		16,726		617
2019 – 2023		90,649		2,513
Total	$	172,124	$	6,719