Employee Benefit Plans

12 Months Ended

May 31, 2012

Employee Benefit Plans

Employee Benefit Plans

7. Employee Benefit Plans

        We have defined contribution and defined benefit plans covering substantially all full-time domestic employees and certain employees in The Netherlands, Germany and Norway.

Defined Benefit Plans

        Prior to January 1, 2000, the pension plan for domestic salaried and non-union hourly employees had a benefit formula based primarily on years of service and compensation. Effective January 1, 2000, we converted our defined benefit plan for substantially all domestic salaried and certain hourly employees to a cash balance pension plan. Under the cash balance pension plan, the retirement benefit is expressed as a dollar amount in an account that grows with annual pay-based credits and interest on the account balance. The interest crediting rate under our cash balance plan is determined quarterly and is equal to 100% of the average 30-year treasury rate for the second month preceding the applicable quarter published by the Internal Revenue Service. The average interest crediting rate under our cash balance plan for the fiscal year ended May 31, 2012 was 5.0%. Effective June 1, 2005, the existing cash balance plan was frozen and the annual pay-based credits were discontinued. Also effective June 1, 2005, the defined contribution plan was modified to include increased employer contributions and an enhanced profit sharing formula. Defined pension benefits for certain union hourly employees are based primarily on a fixed amount per year of service.

        Certain foreign operations of domestic subsidiaries also have a defined benefit pension plan. Benefit formulas are based generally on years of service and compensation. It is the policy of these subsidiaries to fund at least the minimum amounts required by local laws and regulations.

        We provide eligible outside directors with benefits upon retirement on or after age 65 provided they have completed at least five years of service as a director. Benefits are paid quarterly in cash equal to 25% of the annual retainer fee payable to active outside directors. Payment of benefits commence upon retirement and continue for a period equal to the total number of years of the retired director's service up to a maximum of ten years, or death, whichever occurs first. In the fourth quarter of fiscal 2001, we terminated the plan for any new members of the Board of Directors first elected after May 31, 2001.

Obligations and Funded Status

        The following table sets forth the changes in projected benefit obligations and plan assets for all of our pension plans:

	May 31,
	2012			2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	105,091		$	104,530
Benefit obligations from acquired companies		4,651			—
Service cost		1,619			2,143
Interest cost		5,453			5,376
Plan participants' contributions		400			385
Net actuarial (gain) loss		17,387			(6,415	)
Benefits paid		(5,455	)		(5,248	)
Plan change		351			—
Curtailment		—			(1,277	)
Translation		(6,537	)		5,597
Benefit obligation at end of year	$	122,960		$	105,091
Change in plan assets:
Fair value of plan assets at beginning of year	$	94,422		$	78,892
Actual return on plan assets		(8	)		9,987
Employer contributions		4,528			4,653
Plan participants' contributions		400			385
Benefits paid		(5,455	)		(5,248	)
Translation		(6,218	)		5,753
Fair value of plan assets at end of year	$	87,669		$	94,422
Funded status at end of year	$	(35,291	)	$	(10,669	)

        Amounts recognized in the consolidated balance sheets consisted of the following:

	May 31,
	2012			2011
Other assets	$	—		$	5,498
Accrued liabilities		(1,887	)		(1,610	)
Other liabilities and deferred income		(33,404	)		(14,557	)
	$	(35,291	)	$	(10,669	)

        Amounts recognized in accumulated other comprehensive loss, net of tax of $20,161 and $12,661 at May 31, 2012 and 2011, respectively, consisted of the following:

	May 31,
	2012		2011
Actuarial loss	$	37,281	$	22,131
Prior service cost		747		564
Total	$	38,028	$	22,695

        Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:

	May 31,
	2012		2011
Projected benefit obligation	$	85,158	$	71,057
Accumulated benefit obligation		85,049		70,903
Fair value of plan assets		50,171		54,890

        The accumulated benefit obligation for all pension plans was $118,317 and $100,529 as of May 31, 2012 and 2011, respectively.

Net Periodic Benefit Cost

        Pension expense charged to results of operations includes the following components:

	For the Year Ended May 31,
	2012			2011			2010
Service cost	$	1,619		$	2,143		$	1,528
Interest cost		5,453			5,376			5,578
Expected return on plan assets		(6,559	)		(5,871	)		(5,936	)
Amortization of prior service cost		150			138			132
Recognized net actuarial loss		990			1,219			1,148
	$	1,653		$	3,005		$	2,450

Assumptions

        The assumptions used in accounting for our plans are estimates of factors including, among other things, the amount and timing of future benefit payments. The following table presents the key assumptions used in the measurement of our benefit obligations:

	May 31,
	2012			2011
Domestic plans:
Discount rate		4.14	%		5.26	%
Rate of compensation increase		2.50			3.50

	May 31,
	2012			2011
Non-domestic plans:
Discount rate		4.11	%		5.80	%
Rate of compensation increase		3.00			3.00

        A summary of the weighted average assumptions used to determine net periodic pension expense is as follows:

	For the Year Ended May 31,
	2012			2011			2010
Domestic plans:
Discount rate		5.26	%		5.60	%		6.82	%
Rate of compensation increase		3.50			3.50			3.50
Expected long-term return on plan assets		8.00			8.00			8.50
Non-domestic plans:
Discount rate		5.54	%		4.50	%		5.90	%
Rate of compensation increase		3.00			3.00			3.00
Expected long-term return on plan assets		5.80			4.50			6.50

        The discount rate was determined by projecting the plan's expected future benefit payments as defined for the projected benefit obligation, discounting those expected payments using a theoretical zero-coupon spot yield curve derived from a universe of high-quality bonds as of the measurement date, and solving for the single equivalent discount rate that resulted in the same projected benefit obligation.

Plan Assets

        The following table sets forth the actual asset allocation and target allocations for our U.S. pension plans:

	May 31,
							Target Asset Allocation
	2012			2011
Equity securities		59	%		60	%	45 – 75%
Fixed income securities		22			22		15 – 45%
Other (fund-of-funds hedge fund)		19			18		0 – 25%
		100	%		100	%

        The assets of U.S pension plans are invested in compliance with the Employee Retirement Income Security Act of 1974 (ERISA). The investment goals are to provide a total return that, over the long term, optimizes the long-term return on plan assets at an acceptable risk, and to maintain a broad diversification across asset classes and among investment managers. We believe that there are no significant concentrations of risk within our plan assets as of May 31, 2012. Direct investments in our securities and the use of derivatives for the purpose of speculation are not permitted. The assets of the U.S. pension plans are invested primarily in equity and fixed income mutual funds, individual common stocks and fund-of-funds hedge funds.

        The assets of the non-domestic plan are invested in compliance with local laws and regulations and are comprised primarily of equity and fixed income mutual funds.

        To develop our expected long-term rate of return assumption on domestic plans, we use long-term historical return information for our targeted asset mix and current market conditions.

        The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2012:

	Level 11		Level 22		Level 33		Total
Equity securities:
Large/medium capitalization	$	17,500	$	—	$	—	$	17,500
Small capitalization		6,379		—		—		6,379
International		5,452		7,460		—		12,912
Fixed income		11,338		25,952		—		37,290
Hedge funds		—		3,837		9,358		13,195
Cash and other		145		248		—		393
Total investments	$	40,814	$	37,497	$	9,358	$	87,669

¹

Quoted prices in active markets

²

Significant other observable inputs

³

Significant other unobservable inputs

Cash Flow

        The following table summarizes our estimated future pension benefits by fiscal year:

	Fiscal Year
	2013		2014		2015		2016		2017		2018 to 2022
Estimated pension benefits	$	8,332	$	5,103	$	6,568	$	5,277	$	5,228	$	30,519

        Our contribution policy for the domestic plans is to contribute annually, at a minimum, an amount which is deductible for federal income tax purposes and that is sufficient to meet actuarially computed pension benefits. We anticipate contributing $5,500 to $7,500 during fiscal 2013.

Additional Information

        The estimated amounts for our plans that will be amortized from accumulated other comprehensive loss into expense over the next fiscal year are as follows:

Amortization of net actuarial loss	$	1,874
Amortization of prior service cost	$	157

Postretirement Benefits Other Than Pensions

        We provide health and life insurance benefits for certain eligible retirees. The postretirement plans are unfunded and in fiscal 1995, we completed termination of postretirement health and life insurance benefits attributable to future services of collective bargaining and other domestic employees. The unfunded projected benefit obligation for this plan was $1,136 and $1,187 as of May 31, 2012 and 2011, respectively. We have omitted substantially all of the required disclosures related to this plan because the plan is not material to our consolidated financial position or results of operations.

Defined Contribution Plan

        The defined contribution plan is a profit sharing plan which is intended to qualify as a 401(k) plan under the Internal Revenue Code. Under the plan, employees may contribute up to 75% of their pretax compensation, subject to applicable regulatory limits. We may make matching contributions up to 5% of compensation as well as discretionary profit sharing contributions. Our contributions vest on a pro-rata basis during the first three years of employment. We also provide profit sharing benefits for certain executives and key employees to supplement the benefits provided by the defined contribution plan. Expense charged to results of operations for our matching contributions, including profit sharing contributions, was $13,159 in fiscal 2012, $10,469 in fiscal 2011 and $8,065 in fiscal 2010 for these plans.