NOTE N—POSTRETIREMENT BENEFITS

We sponsor several unfunded-health-care-benefit plans for certain of our retired employees as well as post-retirement life insurance for certain key employees. Eligibility for these benefits is based upon various requirements. The following table illustrates the effect on operations of these plans for the three years ended May 31, 2013:


	U.S. Plans									Non-U.S. Plans
(In thousands)	2013			2012			2011			2013		2012		2011
Service cost—Benefits earned during the period	$	—		$	—		$	5		$	1,185	$	745	$	736
Interest cost on the accumulated obligation		349			416			439			1,188		968		925
Amortization of:
Prior service cost		(86	)		(86	)		(86	)
Unrecognized losses		16			(58	)		(191	)		470		72		89

Net Periodic Postretirement Expense	$	279		$	272		$	167		$	2,843	$	1,785	$	1,750

The changes in benefit obligations of the plans at May 31, 2013 and 2012 were as follows:


	U.S. Plans						Non-U.S. Plans
(In thousands)	2013			2012			2013			2012
Accumulated postretirement benefit obligation at beginning of year	$	9,677		$	9,103		$	24,517		$	17,557
Service cost								1,185			745
Interest cost		349			416			1,188			968
Benefit payments		(572	)		(665	)		(441	)		(369	)
Medicare subsidy received		74			69
Actuarial (gains) losses		(1,014	)		754			1,988			6,979
Currency exchange rate changes								(22	)		(1,363	)

Accumulated and accrued postretirement benefit obligation at end of year	$	8,514		$	9,677		$	28,415		$	24,517

In determining the postretirement benefit amounts outlined above, measurement dates as of May 31 for each period were applied.

Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2013 and 2012 are as follows:


	U.S. Plans						Non-U.S. Plans
(In thousands)	2013			2012			2013			2012
Current liabilities	$	(642	)	$	(714	)	$	(486	)	$	(428	)
Noncurrent liabilities		(7,872	)		(8,963	)		(27,929	)		(24,089	)

Net Amount Recognized	$	(8,514	)	$	(9,677	)	$	(28,415	)	$	(24,517	)

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


	U.S. Plans					Non-U.S. Plans
(In thousands)	2013		2012			2013			2012
Net actuarial gain (loss)	$	996	$	(35	)	$	(10,950	)	$	(9,441	)
Prior service credits		516		603

Total recognized in accumulated other comprehensive income not affecting retained earnings	$	1,512	$	568		$	(10,950	)	$	(9,441	)

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


	U.S. Plans					Non-U.S. Plans
(In thousands)	2013			2012		2013			2012
Changes in plan assets and benefit obligations recognized in other comprehensive income:
Prior service cost	$	—		$	—	$	—		$	—
Net loss (gain) arising during the year		(1,014	)		754		1,988			6,979
Effect of exchange rates on amounts included in AOCI							(9	)		(409	)
Amounts recognized as a component of net periodic benefit cost:
Amortization or curtailment recognition of prior service credit (cost)		86			86
Amortization or settlement recognition of net gain (loss)		(16	)		58		(470	)		(72	)

Total recognized in other comprehensive loss (income)	$	(944	)	$	898	$	1,509		$	6,498

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


	U.S. Plans						Non-U.S. Plans
Year-End Benefit Obligations	2013			2012			2013			2012
Discount rate	3.95%				3.75	%		4.50	%		4.75	%
Current healthcare cost trend rate	7.54%				7.70	%		6.43	%		6.92	%
Ultimate healthcare cost trend rate	4.50%				4.50	%		4.20	%		4.20	%
Year ultimate healthcare cost trend rate will be realized	2029				2029			2030			2030

	U.S. Plans									Non-U.S. Plans
Net Periodic Postretirement Cost	2013			2012			2011			2013			2012			2011
Discount rate		3.75	%		4.75	%		5.75	%		4.75	%		5.75	%		5.75	%
Healthcare cost trend rate		7.70	%		7.87	%		8.04	%		6.92	%		7.00	%		7.40	%
Ultimate healthcare cost trend rate		4.50	%		4.50	%		4.50	%		4.20	%		4.50	%		4.50	%
Year ultimate healthcare cost trend rate will be realized		2029			2029			2029			2030			2030			2030

Increasing or decreasing current healthcare cost trend rates by 1% would affect our accumulated postretirement benefit obligation and net postretirement expense by the following amounts for the years ended May 31, 2013 and 2012:


	U.S. Plans						Non-U.S. Plans
(In thousands)	2013			2012			2013			2012
1% Increase in trend rate
Accumulated Benefit Obligation	$	296		$	390		$	9,080		$	3,920
Postretirement Cost		15			21			647			473

1% Decrease in trend rate
Accumulated Benefit Obligation	$	(265	)	$	(348	)	$	(3,802	)	$	(5,176	)
Postretirement Cost		(13	)		(19	)		(481	)		(351	)

We expect to pay approximately $1.1 million to $1.4 million in estimated postretirement benefits in each of the next five years. In the five years thereafter (2019-2023) we expect to pay a cumulative total of $8.4 million.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”), was signed into law on December 8, 2003. The Act provides for prescription drug benefits under Medicare Part D and contains a subsidy to plan sponsors who provide “actuarially equivalent” prescription drug plans. Our actuary has determined that the prescription drug benefit provided by our postretirement plan is considered to be actuarially equivalent to the benefits provided under the Act for all years since inception.

We have included the impact of our portion of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 subsidy in the determination of accumulated postretirement benefit obligation for the U.S. nonpension postretirement benefit plan for the periods ended May 31, 2013 and 2012. For the fiscal years ended May 31, 2013 and 2012, we received reimbursements from Medicare related to this law amounting to approximately $74,000 and $69,000, respectively.