Pension Plans

12 Months Ended

May 31, 2024

Retirement Benefits [Abstract]

Pension Plans

NOTE N — PENSION PLANS

We sponsor several pension plans for our associates, including our principal plan (the “Retirement Plan”), which is a non-contributory defined benefit pension plan covering substantially all domestic non-union associates. Pension benefits are provided for certain domestic union associates through separate plans. Associates of our foreign subsidiaries receive pension coverage, to the extent deemed appropriate, through plans that are governed by local statutory requirements.

The Retirement Plan provides benefits that are based upon years of service and average compensation with accrued benefits vesting after five years. Benefits for union associates are generally based upon years of service, or a combination of years of service and average compensation. Our pension funding policy considers contributions in an amount on an annual basis that can be deducted for federal income tax purposes, using a different actuarial cost method and different assumptions from those used for financial reporting. For the fiscal year ending May 31, 2025, we are required, based on minimum funding rules, to contribute approximately $5.7 million to our foreign plans. Required contributions, based on minimum funding rules, to the retirement plans in the United States for fiscal 2025 are immaterial. During the year, we will evaluate whether to make contributions in excess of the minimum required amounts. During fiscal

2024, we contributed $41.9 million to the pension plans in the United States which was in excess of the required contribution of $0.7 million but serves to improve the funded status of the plans.

Net periodic pension cost consisted of the following for the year ended May 31:

	U.S. Plans									Non-U.S. Plans
(In thousands)	2024			2023			2022			2024			2023			2022
Service cost	$	43,652		$	43,558		$	47,655		$	3,534		$	3,633		$	5,023
Interest cost		35,967			28,692			15,366			7,667			6,619			4,948
Expected return on plan assets		(42,072	)		(38,144	)		(41,544	)		(9,588	)		(6,581	)		(7,691	)
Amortization of:
Prior service cost (credit)		2			1			5			(127	)		(116	)		(139	)
Net actuarial losses recognized		16,822			17,948			16,900			833			473			465
Curtailment/settlement (gains) losses		-			(3	)		16			(50	)		188			7
Net Pension Cost	$	54,371		$	52,052		$	38,398		$	2,269		$	4,216		$	2,613

The changes in benefit obligations and plan assets, as well as the funded status of our pension plans at May 31, 2024 and 2023, were as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2024			2023			2024			2023
Benefit obligation at beginning of year	$	697,173		$	703,735		$	158,812		$	182,534
Service cost		43,652			43,558			3,534			3,633
Interest cost		35,967			28,692			7,667			6,619
Benefits paid		(40,540	)		(44,604	)		(8,102	)		(8,676	)
Participant contributions		-			-			1,149			1,221
Plan amendments		-			4			(2	)		(97	)
Plan settlements/curtailments		-			(137	)		(1,090	)		(2,852	)
Actuarial (gains) losses		(16,589	)		(34,075	)		3,461			(16,004	)
Premiums paid		-			-			(83	)		(108	)
Currency exchange rate changes		-			-			714			(7,458	)
Benefit Obligation at End of Year	$	719,663		$	697,173		$	166,060		$	158,812
Fair value of plan assets at beginning of year	$	631,486		$	616,960		$	166,120		$	193,375
Actual gain (loss) on plan assets		87,205			(4,294	)		9,973			(15,239	)
Employer contributions		41,928			63,561			5,449			6,647
Participant contributions		-			-			1,149			1,221
Benefits paid		(40,540	)		(44,604	)		(8,102	)		(8,676	)
Premiums paid		-			-			(83	)		(108	)
Plan settlements/curtailments		-			(137	)		(1,090	)		(2,852	)
Currency exchange rate changes		-			-			844			(8,248	)
Fair Value of Plan Assets at End of Year	$	720,079		$	631,486		$	174,260		$	166,120
Surplus/(Deficit) of plan assets versus benefit obligations at end of year	$	416		$	(65,687	)	$	8,200		$	7,308
Net Amount Recognized	$	416		$	(65,687	)	$	8,200		$	7,308
Accumulated Benefit Obligation	$	618,413		$	598,094		$	156,571		$	148,635

The fair value of the assets held by our pension plans has increased at May 31, 2024 since our previous measurement date at May 31, 2023, due to contributions and market returns. Total plan liabilities increased slightly due to an increase in interest cost caused by an increase in the discount rate, as well as a smaller actuarial gain than in the prior year. We have recorded an overfunded position for the net status of our pension plans. We expect pension expense in fiscal 2025 to be lower than our fiscal 2024 expense level due to an increase in expected return on plan assets and a reduction in the amortization of the net actuarial loss to be recognized. Any future declines in the value of our pension plan assets or increases in our plan liabilities could require us to increase our recorded liability for the net underfunded status of our pension plans and could also require accelerated and higher cash contributions to our pension plans.

Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2024 and 2023 are as follows:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2024			2023			2024			2023
Noncurrent assets	$	1,294		$	279		$	16,681		$	15,641
Current liabilities		(8	)		(8	)		(362	)		(659	)
Noncurrent liabilities		(870	)		(65,958	)		(8,119	)		(7,674	)
Net Amount Recognized	$	416		$	(65,687	)	$	8,200		$	7,308

The following table summarizes the relationship between our plans' benefit obligations and assets:

	U.S. Plans
	2024				2023
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	712,123	$	711,245	$	696,280	$	630,315
Plans with accumulated benefit obligations in excess of plan assets		41		-		44		-
Plans with assets in excess of projected benefit obligations		7,540		8,834		893		1,171
Plans with assets in excess of accumulated benefit obligations		618,372		720,079		598,050		631,486
	Non-U.S. Plans
	2024				2023
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	28,469	$	19,988	$	26,918	$	18,585
Plans with accumulated benefit obligations in excess of plan assets		25,001		17,730		24,837		17,839
Plans with assets in excess of projected benefit obligations		137,591		154,272		131,894		147,535
Plans with assets in excess of accumulated benefit obligations		131,570		156,530		123,798		148,281

The following table presents the pretax net actuarial loss and prior service (cost) credits recognized in accumulated other comprehensive income (loss) not affecting retained earnings:

	U.S. Plans						Non-U.S. Plans
(In thousands)	2024			2023			2024			2023
Net actuarial loss	$	(126,481	)	$	(205,025	)	$	(32,209	)	$	(29,764	)
Prior service (costs) credits		(8	)		(10	)		424			530
Total recognized in accumulated other comprehensive    income not affecting retained earnings	$	(126,489	)	$	(205,035	)	$	(31,785	)	$	(29,234	)

The following table includes the changes recognized in other comprehensive income:

		U.S. Plans						Non-U.S. Plans
(In thousands)		2024			2023			2024			2023
Changes in plan assets and benefit obligations recognized in other    comprehensive income:
	Prior service cost (credit)	$	-		$	4		$	(1	)	$	(98	)
	Net (gain) loss arising during the year		(61,722	)		8,363			3,075			5,816
	Effect of exchange rates on amounts included in AOCI		-			-			133			(1,405	)
Amounts recognized as a component of net periodic benefit cost:
	Amortization or curtailment recognition of prior service (cost) benefit		(2	)		(1	)		127			115
	Amortization or settlement recognition of net (loss)		(16,822	)		(17,945	)		(783	)		(660	)
	Total recognized in other comprehensive (income) loss	$	(78,546	)	$	(9,579	)	$	2,551		$	3,768

In measuring the projected benefit obligation and net periodic pension cost for our plans, we utilize actuarial valuations. These valuations include specific information pertaining to individual plan participants, such as salary, age and years of service, along with certain assumptions. The most significant assumptions applied include discount rates, expected return on plan assets and rate of compensation increases. We evaluate these assumptions, at a minimum, on an annual basis, and make required changes, as applicable. In developing our expected long-term rate of return on pension plan assets, we consider the current and expected target asset allocations of the pension portfolio, as well as historical returns and future expectations for returns on various categories of plan assets. Expected return on assets is determined by using the weighted-average return on asset classes based on expected return for the target asset allocations of the principal asset categories held by each plan. In determining expected return, we consider both historical performance and an estimate of future long-term rates of return. Actual experience is used to develop the assumption for compensation increases.

The following weighted-average assumptions were used to determine our year-end benefit obligations and net periodic pension cost under the plans:

	U.S. Plans						Non-U.S. Plans
Year-End Benefit Obligations	2024			2023			2024			2023
Discount rate		5.58	%		5.26	%		4.81	%		4.88	%
Rate of compensation increase		3.39	%		3.39	%		2.98	%		2.97	%

	U.S. Plans									Non-U.S. Plans
Net Periodic Pension Cost	2024			2023			2022			2024			2023			2022
Discount rate		5.26	%		4.43	%		2.76	%		4.88	%		4.02	%		2.72	%
Expected return on plan assets		7.00	%		6.50	%		6.50	%		5.79	%		3.58	%		3.46	%
Rate of compensation increase		3.39	%		3.21	%		3.19	%		2.97	%		2.94	%		2.91	%

The following tables illustrate the weighted-average actual and target allocation of plan assets:

	U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2024			2024		2023
Equity securities		55	%	$	399.0	$	340.1
Fixed income securities		20	%		151.2		129.2
Multi-class		20	%		141.2		125.3
Cash		5	%		28.5		36.6
Other					0.2		0.3
Total assets		100	%	$	720.1	$	631.5
	Non-U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2024			2024		2023
Equity securities		40	%	$	60.4	$	61.8
Fixed income securities		48	%		82.9		81.5
Cash					0.2		0.1
Property and other		12	%		30.8		22.7
Total assets		100	%	$	174.3	$	166.1

The following tables present our pension plan assets as categorized using the fair value hierarchy at May 31, 2024 and 2023:

U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2024
U.S. Treasury and other government	$	-	$	53,751	$	-	$	53,751
State and municipal bonds		-		210		-		210
Foreign bonds		-		2,480		-		2,480
Mortgage-backed securities		-		14,922		-		14,922
Corporate bonds		-		14,904		-		14,904
Stocks - large cap		44,392		-		-		44,392
Mutual funds - equity		-		354,599		-		354,599
Mutual funds - multi-class		-		141,183		-		141,183
Mutual funds - fixed		-		2,317		-		2,317
Cash and cash equivalents		28,523		-		-		28,523
Limited partnerships		-		-		74		74
Futures contracts		-		-		120		120
Investments measured at NAV (1)								62,604
Total	$	72,915	$	584,366	$	194	$	720,079

(1)In accordance with Subtopic 820-10, Fair Value Measurements and Disclosures, certain investments that are measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy. The investments that are measured at fair value using NAV per share included in the table above are intended to permit reconciliation of the fair value hierarchy to the fair value of the plan assets at the end of each period.

Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2024
Pooled equities	$	-	$	60,455	$	-	$	60,455
Pooled fixed income		-		81,798		-		81,798
Foreign bonds		-		1,066		-		1,066
Insurance contracts		-		-		20,283		20,283
Mutual funds - Real Estate		-		10,483		-		10,483
Cash and cash equivalents		175		-		-		175
Total	$	175	$	153,802	$	20,283	$	174,260

U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2023
U.S. Treasury and other government	$	-	$	49,297	$	-	$	49,297
State and municipal bonds		-		450		-		450
Foreign bonds		-		690		-		690
Mortgage-backed securities		-		8,515		-		8,515
Corporate bonds		-		17,376		-		17,376
Stocks - large cap		35,467		-		-		35,467
Mutual funds - equity		-		304,590		-		304,590
Mutual funds - multi-class		-		125,345		-		125,345
Mutual funds - fixed		-		2,553		-		2,553
Cash and cash equivalents		36,573		-		-		36,573
Limited partnerships		-		-		170		170
Futures contracts		-		-		112		112
Investments measured at NAV (1)								50,348
Total	$	72,040	$	508,816	$	282	$	631,486

Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2023
Pooled equities	$	-	$	61,827	$	-	$	61,827
Pooled fixed income		-		80,650		-		80,650
Foreign bonds		-		774		-		774
Insurance contracts		-		-		19,136		19,136
Mutual funds - Real Estate		-		3,587		-		3,587
Cash and cash equivalents		146		-		-		146
Total	$	146	$	146,838	$	19,136	$	166,120

The following table includes the activity that occurred during the years ended May 31, 2024 and 2023 for our Level 3 assets:

			Actual Return on Plan Assets For:
	Balance at		Assets Still Held			Assets Sold		Purchases, Sales and			Balance at
(In thousands)	Beginning of Period		at Reporting Date			During Year		Settlements, net (1)			End of Period
Year ended May 31, 2024	$	19,418		1,051			-		8		$	20,477
Year ended May 31, 2023		23,179		(2,399	)		-		(1,362	)		19,418

(1)Includes the impact of exchange rate changes during the year.

The primary objective for the investments of the Retirement Plan is to provide for long-term growth of capital without undue exposure to risk. This objective is accomplished by utilizing a diversified portfolio strategy of equities, fixed-income securities and cash equivalents in a mix that is conducive to participation in a rising market, while allowing for adequate protection in a falling market. Our Investment Committee oversees the investment allocation process, which includes the selection and evaluation of investment managers, the determination of investment objectives and risk guidelines, and the monitoring of actual investment performance. In order to manage investment risk properly, Plan policy prohibits short selling, securities lending, financial futures, options and other specialized investments, except for certain alternative investments specifically approved by the Investment Committee. The Investment Committee reviews, on a quarterly basis, reports of actual Plan investment performance provided by independent third parties, in addition to its review of the Plan investment policy on an annual basis. The investment objectives are similar for our plans outside of the United States, subject to local regulations.

The goals of the investment strategy for pension assets include: the total return of the funds shall, over an extended period of time, surpass an index composed of the MSCI World Stock Index (equity), the Barclays Long-Term Government/Credit Index (fixed income), and 30-day Treasury Bills (cash), weighted appropriately to match the asset allocation of the plans. The equity portion of the funds shall surpass the MSCI World Stock Index over a full market cycle, while the fixed-income portion shall surpass Barclays Long-Term Government/Credit Index over a full market cycle. The purpose of the fixed-income fund is to reduce the overall volatility of the plan liabilities and provide a hedge against interest rate fluctuations. Therefore, the primary objective of the fixed-income portion is to match the Barclays Long-Term Government/Credit Index.

We expect to pay the following estimated pension benefit payments in the next five years (in millions): $67.0 in 2025, $73.4 in 2026, $76.3 in 2027, $80.0 in 2028 and $86.5 in 2029. In the five years thereafter (2030-2034), we expect to pay $432.5 million.

In addition to the defined benefit pension plans discussed above, we also sponsor associate savings plans under Section 401(k) of the Internal Revenue Code, which cover most of our associates in the United States. We record expense for defined contribution plans for any employer-matching contributions made in conjunction with services rendered by associates. The majority of our plans provide for matching contributions made in conjunction with services rendered by associates. Matching contributions are invested in the same manner that the participants invest their own contributions. Matching contributions charged to income were $29.8 million, $27.6 million and $24.7 million for the years ending May 31, 2024, 2023 and 2022, respectively.