POST RETIREMENT BENEFIT PLANS

Defined Benefit Pension Plans

The Company has certain non-contributory defined benefit pension plans for salaried and hourly employees in the United States, Canada, Germany, the Netherlands, South Africa and the United Kingdom. The Company uses a measurement date of October 31 for fair value purposes for its pension plans. The salaried employees plans’ benefits are based primarily on years of service and earnings. The hourly employees plans’ benefits are based primarily upon years of service. Certain benefit provisions are subject to collective bargaining. The Company contributes an amount that is not less than the minimum funding and not more than the maximum tax-deductible amount to these plans. Salaried employees in the United States who commence service on or after November 1, 2007 and various dates in the preceding five years for the non-U.S. plans are not eligible to participate in the defined benefit pension plans, but are eligible to participate in a defined contribution retirement program. The category “Other International” represents the noncontributory defined benefit pension plans in Canada and South Africa.

Pension plan contributions by the Company totaled $20.6 million during 2016, which consisted of $17.3 million of employer contributions and $3.3 million of benefits paid directly by the Company. Pension plan contributions, including benefits paid directly by the Company, totaled $11.4 million and $16.9 million during 2015 and 2014, respectively. Contributions, including benefits paid directly by the Company, during 2017 are expected to be approximately $20.6 million.

The following table presents the number of participants in the defined benefit plans (in thousands):



October 31, 2016	Consolidated	United States	Germany	United Kingdom	Netherlands	Other International
Active participants	1,573	1,405	95	—	73	—
Vested former employees and deferred members	2,149	1,484	60	462	89	54
Retirees and beneficiaries	4,114	2,565	258	699	534	58

October 31, 2015	Consolidated	United States	Germany	United Kingdom	Netherlands	Other International
Active participants	1,869	1,509	105	133	74	48
Vested former employees	2,083	1,525	57	399	81	21
Retirees and beneficiaries	4,050	2,480	255	718	540	57

The actuarial assumptions are used to measure the year-end benefit obligations as of October 31, 2016 and the pension costs for the subsequent year were as follows:



For the year ended October 31, 2016	Consolidated		United States		Germany		United Kingdom		Netherlands		Other International
Discount rate	3.08	%	3.79	%	1.50	%	2.44	%	1.32	%	4.31	%
Expected return on plan assets	5.51	%	6.25	%	N/A		6.00	%	1.88	%	5.77	%
Rate of compensation increase	2.87	%	3.00	%	2.75	%	N/A		2.25	%	N/A
For the year ended October 31, 2015	Consolidated		United States		Germany		United Kingdom		Netherlands		Other International
Discount rate	3.71	%	4.37	%	2.10	%	3.45	%	1.98	%	4.82	%
Expected return on plan assets	5.47	%	6.25	%	N/A		6.00	%	2.06	%	5.99	%
Rate of compensation increase	3.01	%	3.00	%	2.75	%	3.50	%	2.25	%	N/A
For the year ended October 31, 2014	Consolidated		United States		Germany		United Kingdom		Netherlands		Other International
Discount rate	3.69	%	4.22	%	2.45	%	3.72	%	2.20	%	4.83	%
Expected return on plan assets	5.73	%	6.25	%	N/A		6.25	%	3.25	%	6.09	%
Rate of compensation increase	2.93	%	3.00	%	2.75	%	3.25	%	2.25	%	2.41	%

The discount rate is determined by developing a hypothetical portfolio of individual high-quality corporate bonds available at the measurement date, the coupon and principal payments of which would be sufficient to satisfy the plans’ expected future benefit payments as defined for the projected benefit obligation. The discount rate by country is equivalent to the average yield on that hypothetical portfolio of bonds and is a reflection of current market settlement rates on such high quality bonds, government treasuries, and annuity purchase rates. To determine the expected long-term rate of return on pension plan assets, the Company considers current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. In developing future return expectations for the defined benefit pension plans’ assets; the Company formulates views on the future economic environment, both in the U.S. and globally. The Company evaluates general market trends and historical relationships among a number of key variables that impact asset class returns, such as expected earnings growth, inflation, valuations, yields and spreads, using both internal and external sources. The Company takes into account expected volatility by asset class and diversification across classes to determine expected overall portfolio results given current and expected allocations. The Company uses published mortality tables for determining the expected lives of plan participants and believe that the tables selected are most-closely associated with the expected lives of plan participants as the tables are based on the country in which the participant is employed.

Based on our analysis of future expectations of asset performance, past return results, and our current and expected asset allocations, we have assumed a 5.51% long-term expected return on those assets for cost recognition in 2016. For the defined benefit pension plans, we apply our expected rate of return to a market-related value of assets, which stabilizes variability in the amounts to which we apply that expected return.

We amortize experience gains and losses as well as the effects of changes in actuarial assumptions and plan provisions over a period no longer than the average future service of employees.

Subsequent to October 31, 2016, an annuity contract for approximately $49.2 million was purchased with defined benefit plan assets and the pension obligation for certain retirees in the United States was irrevocably transferred from that plan to the annuity contract. Additionally, lump sum payments totalling $32.4 million were made from the defined benefit plan assets to certain participants who agreed to such payments, representing the current fair value of the participant's respective pension benefit. The settlement items described above resulted in a decrease in projected benefit obligation of $81.6 million and a settlement cost of $22.8 million, which will be recognized during the first quarter of 2017. The settlement items will decrease future service costs for the United States defined benefit plan.

Benefit Obligations

The components of net periodic pension cost include the following (Dollars in millions):



For the year ended October 31, 2016	Consolidated			United States			Germany		United Kingdom			Netherlands			Other International
Service cost	$	12.4		$	10.2		$	0.5	$	0.8		$	0.7		$	0.2
Interest cost	22.0			13.7			0.8		5.7			1.4			0.4
Expected return on plan assets	(32.1		)	(19.0		)	—		(10.7		)	(1.7		)	(0.7		)
Amortization of prior service cost	(0.2		)	(0.1		)	—		—			(0.1		)	—
Recognized net actuarial loss	11.4			9.3			1.0		0.8			0.3			—
Special Events
Settlement	0.1			—			—		—			—			0.1
Net periodic pension (benefit) cost	$	13.6		$	14.1		$	2.3	$	(3.4	)	$	0.6		$	—
For the year ended October 31, 2015	Consolidated			United States			Germany		United Kingdom			Netherlands			Other International
Service cost	$	15.5		$	11.3		$	0.5	$	1.8		$	1.4		$	0.5
Interest cost	27.6			17.3			0.9		6.5			2.4			0.5
Expected return on plan assets	(32.8		)	(18.7		)	—		(11.4		)	(1.9		)	(0.8		)
Amortization of prior service cost	0.1			0.1			—		—			—			—
Recognized net actuarial loss	14.2			10.0			0.9		2.2			0.8			0.3
Special Events
Curtailment	0.5			0.3			—		—			—			0.2
Settlement	0.1			—			—		—			—			0.1
Special/contractual termination benefit	0.1			—			—		—			—			0.1
Net periodic pension (benefit) cost	$	25.3		$	20.3		$	2.3	$	(0.9	)	$	2.7		$	0.9
For the year ended October 31, 2014	Consolidated			United States			Germany		United Kingdom			Netherlands			Other International
Service cost	$	15.7		$	10.4		$	0.6	$	2.5		$	1.6		$	0.6
Interest cost	29.6			16.6			1.3		7.5			3.6			0.6
Expected return on plan assets	(33.9		)	(17.4		)	—		(12.6		)	(3.1		)	(0.8		)
Amortization of prior service cost	0.2			0.2			—		—			—			—
Recognized net actuarial loss	10.4			6.8			0.7		1.9			0.8			0.2
Net periodic pension (benefit) cost	$	22.0		$	16.6		$	2.6	$	(0.7	)	$	2.9		$	0.6

Benefit obligations are described in the following tables. Accumulated and projected benefit obligations (ABO and PBO) represent the obligations of a pension plan for past service as of the measurement date. ABO is the present value of benefits earned to date with benefits computed based on current compensation levels. PBO is ABO increased to reflect expected future compensation.

The following table sets forth the plans’ change in projected benefit obligation (Dollars in millions):



For the year ended October 31, 2016	Consolidated			United States			Germany			United Kingdom			Netherlands			Other International
Change in benefit obligation:
Benefit obligation at beginning of year	$	765.8		$	432.1		$	38.7		$	184.0		$	100.8		$	10.2
Service cost	12.4			10.2			0.5			0.8			0.7			0.2
Interest cost	22.0			13.7			0.8			5.7			1.4			0.4
Plan participant contributions	0.2			—			—			—			0.2			—
Expenses paid from assets	(4.0		)	(3.3		)	—			(0.7		)	0.2			(0.2		)
Plan Amendments	0.5			0.5			—			—			—			—
Actuarial (gain) loss	70.1			39.1			3.6			33.4			(7.1		)	1.1
Foreign currency effect	(43.4		)	—			(0.6		)	(41.5		)	(1.2		)	(0.1		)
Benefits paid	(39.8		)	(22.1		)	(1.2		)	(10.3		)	(4.9		)	(1.3		)
Benefit obligation at end of year	$	783.8		$	470.2		$	41.8		$	171.4		$	90.1		$	10.3
For the year ended October 31, 2015	Consolidated			United States			Germany			United Kingdom			Netherlands			Other International
Change in benefit obligation:
Benefit obligation at beginning of year	$	786.9		$	419.6		$	41.9		$	186.9		$	123.6		$	14.9
Service cost	15.5			11.3			0.5			1.8			1.4			0.5
Interest cost	27.6			17.3			0.9			6.5			2.4			0.5
Plan participant contributions	0.2			—			—			—			0.2			—
Expenses paid from assets	(2.7		)	(2.1		)	—			(0.7		)	0.2			(0.1		)
Plan Amendments	(3.3		)	(2.3		)	—			—			(1.0		)	—
Actuarial (gain) loss	15.7			9.1			2.2			9.0			(4.6		)	—
Foreign currency effect	(33.7		)	—			(5.6		)	(9.7		)	(16.2		)	(2.2		)
Benefits paid	(33.0		)	(18.4		)	(1.2		)	(7.3		)	(5.2		)	(0.9		)
Curtailments	(7.2		)	(2.1		)	—			(2.5		)	—			(2.6		)
Other	(0.2		)	(0.3		)	—			—			—			0.1
Benefit obligation at end of year	$	765.8		$	432.1		$	38.7		$	184.0		$	100.8		$	10.2

The following tables set forth the PBO, ABO, plan assets and instances where the ABO exceeds the plan assets for the respective years (Dollars in millions):




Actuarial value of benefit obligations	Consolidated		United States		Germany		United Kingdom		Netherlands		Other International
October 31, 2016
Projected benefit obligation	$	783.8	$	470.2	$	41.8	$	171.4	$	90.1	$	10.3
Accumulated benefit obligation	752.9		443.4		39.1		171.4		88.7		10.3
Plan assets	626.3		332.5		—		185.1		96.1		12.6
October 31, 2015
Projected benefit obligation	$	765.8	$	432.1	$	38.7	$	184.0	$	100.8	$	10.2
Accumulated benefit obligation	739.9		409.8		35.9		184.0		100.0		10.2
Plan assets	624.7		311.1		—		208.4		92.7		12.5
Plans with ABO in excess of Plan assets
October 31, 2016
Accumulated benefit obligation	$	492.7	$	443.4	$	39.1	$	—	$	—	$	10.2
Plan assets	342.5		332.5		—		—		—		10.0
October 31, 2015
Accumulated benefit obligation	$	546.5	$	409.8	$	35.9	$	—	$	100.0	$	0.8
Plan assets	404.4		311.1		—		—		92.7		0.6

Future benefit payments for the Company's global plans, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are as follows (Dollars in millions):




Year	Expected benefit payments
2017	$	42.2
2018	42.3
2019	43.9
2020	44.5
2021	44.4
2022-2026	242.7

Plan assets

The plans’ assets consist of domestic and foreign equity securities, government and corporate bonds, cash, insurance annuity mutual funds and not more than the allowable number of shares of the Company’s common stock, which was 247,504 Class A shares and 160,710 Class B shares at October 31, 2016 and 2015.

The investment policy reflects the long-term nature of the plans’ funding obligations. The assets are invested to provide the opportunity for both income and growth of principal. This objective is pursued as a long-term goal designed to provide required benefits for participants without undue risk. It is expected that this objective can be achieved through a well-diversified asset portfolio. All equity investments are made within the guidelines of quality, marketability and diversification mandated by the Employee Retirement Income Security Act and/or other relevant statutes. Investment managers are directed to maintain equity portfolios at a risk level approximately equivalent to that of the specific benchmark established for that portfolio.

The Company’s weighted average asset allocations at the measurement date and the target asset allocations by category are as follows:



Asset Category	2016 Target		2016 Actual		2015 Target		2015 Actual
Equity securities	25	%	29	%	23	%	28	%
Debt securities	49	%	40	%	51	%	40	%
Other	26	%	31	%	26	%	32	%
Total	100	%	100	%	100	%	100	%

The fair value of the pension plans’ investments is presented below. The inputs and valuation techniques used to measure the fair value of the assets are consistently applied and described in Note 10.



For the year ended October 31, 2016	Consolidated			United States			Germany		United Kingdom			Netherlands			Other International
Change in plan assets:
Fair value of plan assets at beginning of year	$	624.7		$	311.1		$	—	$	208.4		$	92.7		$	12.5
Actual return on plan assets	71.6			29.8			—		31.5			9.3			1.0
Expenses paid	(4.0		)	(3.3		)	—		(0.7		)	0.2			(0.2		)
Plan participant contributions	0.2			—			—		—			0.2			—
Foreign currency impact	(47.1		)	—			—		(45.6		)	(1.4		)	(0.1		)
Employer contributions	17.3			14.9			—		1.8			—			0.6
Benefits paid out of plan	(36.4		)	(20.0		)	—		(10.3		)	(4.9		)	(1.2		)
Fair value of plan assets at end of year	$	626.3		$	332.5		$	—	$	185.1		$	96.1		$	12.6
For the year ended October 31, 2015	Consolidated			United States			Germany		United Kingdom			Netherlands			Other International
Change in plan assets:
Fair value of plan assets at beginning of year	$	650.8		$	325.6		$	—	$	202.7		$	107.8		$	14.7
Actual return on plan assets	25.4			(0.9		)	—		21.8			3.9			0.6
Expenses paid	(2.7		)	(2.1		)	—		(0.7		)	0.2			(0.1		)
Plan participant contributions	0.2			—			—		—			0.2			—
Foreign currency impact	(27.3		)	—			—		(10.6		)	(14.2		)	(2.5		)
Employer contributions	8.2			5.0			—		2.5			—			0.7
Benefits paid	(29.9		)	(16.5		)	—		(7.3		)	(5.2		)	(0.9		)
Fair value of plan assets at end of year	$	624.7		$	311.1		$	—	$	208.4		$	92.7		$	12.5

The following table presents the fair value measurements for the pension assets:



As of October 31, 2016 (Dollars in millions)
Asset Category	Fair Value Measurement
	Level 1		Level 2		Level 3		Total
Mutual funds	$	104.9	$	152.3	$	—	$	257.2
Common stock	39.7		—		—		39.7
Cash	18.6		—		—		18.6
Common collective trusts	—		136.7		—		136.7
Corporate bonds	—		29.7		—		29.7
Government bonds	—		16.5		—		16.5
Insurance annuity	—		—		125.4		125.4
Other assets	—		2.5		—		2.5
Total	$	163.2	$	337.7	$	125.4	$	626.3

As of October 31, 2015 (Dollars in millions)
Asset Category	Fair Value Measurement
	Level 1		Level 2		Level 3		Total
Mutual funds	$	124.4	$	161.2	$	—	$	285.6
Common stock	26.7		—		—		26.7
Cash	20.0		—		—		20.0
Money market fund	0.6		—		—		0.6
Common collective trusts	—		128.3		—		128.3
Corporate bonds	—		19.7		—		19.7
Government bonds	—		10.0		—		10.0
Insurance annuity	—		—		130.2		130.2
Other assets	—		3.6		—		3.6
Total	$	171.7	$	322.8	$	130.2	$	624.7

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3). There have been no transfers in or out of level 3:



	Pension Plan
(Dollars in millions)	October 31, 2016			October 31, 2015
Balance at beginning of year	$	130.2		$	151.1
Actual return on plan assets held at reporting date:
Assets still held at reporting date	10.6			7.1
Plan participant contributions	—			—
Net purchases (settlements)	(6.1		)	—
Transfers	—			(3.4		)
Currency impact	(9.3		)	(24.6		)
Balance at end of year	$	125.4		$	130.2

Financial statement presentation including other comprehensive income:



As of October 31, 2016	Consolidated			United States			Germany			United Kingdom		Netherlands			Other International
Unrecognized net actuarial loss	$	202.5		$	145.4		$	18.4		$	36.4	$	(0.1	)	$	2.4
Unrecognized prior service cost	(2.7		)	(1.2		)	—			—		(1.5		)	—
Unrecognized initial net obligation	—			—			—			—		—			—
Accumulated other comprehensive loss (Pre-tax)	$	199.8		$	144.2		$	18.4		$	36.4	$	(1.6	)	$	2.4
Amounts recognized in the Consolidated Balance Sheets consist of:
Prepaid benefit cost	$	22.2		$	—		$	—		$	13.7	$	6.0		$	2.5
Accrued benefit liability	(179.7		)	(137.7		)	(41.8		)	—		—			(0.2		)
Accumulated other comprehensive loss	199.8			144.2			18.4			36.4		(1.6		)	2.4
Net amount recognized	$	42.3		$	6.5		$	(23.4	)	$	50.1	$	4.4		$	4.7
As of October 31, 2015	Consolidated			USA			Germany			United Kingdom		Netherlands			Other International
Unrecognized net actuarial loss	$	192.1		$	126.6		$	15.9		$	32.9	$	14.9		$	1.8
Unrecognized prior service cost	(3.5		)	(1.8		)	—			—		(1.7		)	—
Unrecognized initial net obligation	—			—			—			—		—			—
Accumulated other comprehensive loss (Pre-tax)	$	188.6		$	124.8		$	15.9		$	32.9	$	13.2		$	1.8
Amounts recognized in the Consolidated Balance Sheets consist of:
Prepaid benefit cost	$	26.7		$	—		$	—		$	24.4	$	—		$	2.3
Accrued benefit liability	(167.8		)	(121.0		)	(38.6		)	—		(8.2		)	—
Accumulated other comprehensive loss	188.6			124.8			15.9			32.9		13.2			1.8
Net amount recognized	$	47.5		$	3.8		$	(22.7	)	$	57.3	$	5.0		$	4.1



	October 31, 2016			October 31, 2015
Accumulated other comprehensive loss at beginning of year	$	188.6		$	198.8
Increase or (decrease) in accumulated other comprehensive (income) or loss
Net transition obligation amortized during fiscal year	—			(0.1		)
Net prior service costs amortized during fiscal year	0.2			(0.1		)
Net loss amortized during fiscal year	(11.4		)	(14.2		)
Prior service cost recognized during fiscal year due to curtailment	—			(0.3		)
Transition obligation recognized during fiscal year due to curtailment	—			(0.2		)
Loss recognized during fiscal year due to settlement	(0.1		)	(0.1		)
Prior service credit occurring during fiscal year	0.5			(3.2		)
Liability loss occurring during fiscal year	69.8			8.4
Asset loss (gain) occurring during fiscal year	(39.4		)	7.5
Increase (decrease) in accumulated other comprehensive loss	$	19.6		$	(2.3	)
Foreign currency impact	(8.4		)	(7.9		)
Accumulated other comprehensive loss at current fiscal year end	$	199.8		$	188.6

In 2017, the Company expects to record an amortization loss of $15.0 million of prior service costs from shareholders’ equity into pension costs.

Defined contribution plans

The Company has several voluntary 401(k) savings plans that cover eligible employees. For certain plans, the Company matches a percentage of each employee’s contribution up to a maximum percentage of base salary. Company contributions to the 401(k) plans were $7.2 million in 2016, $7.8 million in 2015 and $7.3 million in 2014.

Supplemental Employee Retirement Plan

The Company has a supplemental employee retirement plan which is an unfunded plan providing supplementary retirement benefits primarily to certain executives and longer-service employees. The present benefit obligation of the supplemental employee retirement plan is included in the United States defined benefit pension plans above.

Postretirement Health Care and Life Insurance Benefits

The Company has certain postretirement unfunded health and life insurance benefit plans in the United States and South Africa. The Company uses a measurement date of October 31 for its postretirement benefit plans.

The following table presents the number of participants in the post-retirement health and life insurance benefit plan:



October 31, 2016	Consolidated	United States	South Africa
Active participants	22	12	10
Retirees and beneficiaries	704	616	88
October 31, 2015	Consolidated	United States	South Africa
Active participants	25	12	13
Retirees and beneficiaries	757	667	90

The discount rate actuarial assumptions at October 31 are used to measure the year-end benefit obligations and the pension costs for the subsequent year were as follows:



For the year ended:	Consolidated		United States		South Africa
October 31, 2016	4.10	%	3.38	%	9.50	%
October 31, 2015	4.65	%	3.88	%	9.20	%

The components of net periodic cost for the postretirement benefits include the following (Dollars in millions):



For the years ended October 31,	2016			2015			2014
Service cost	$	—		$	—		$	—
Interest cost	0.5			0.7			0.8
Amortization of prior service cost (benefit)	(1.5		)	(1.5		)	(1.6		)
Recognized net actuarial gain	(0.1		)	(0.1		)	—
Net periodic income	$	(1.1	)	$	(0.9	)	$	(0.8	)

The following table sets forth the plans’ change in benefit obligation (Dollars in millions):



	October 31, 2016			October 31, 2015
Benefit obligation at beginning of year	$	14.9		$	17.3
Service cost	—			—
Interest cost	0.5			0.7
Actuarial loss	(0.6		)	(1.0		)
Foreign currency effect	(0.1		)	(0.6		)
Benefits paid	(1.1		)	(1.5		)
Benefit obligation at end of year	$	13.6		$	14.9

Financial statement presentation included other comprehensive income (Dollars in millions):



	October 31, 2016			October 31, 2015
Unrecognized net actuarial gain	$	(2.2	)	$	1.6
Unrecognized prior service credit	(4.3		)	5.8
Accumulated other comprehensive income	$	(6.5	)	$	7.4

The accumulated postretirement health and life insurance benefit obligation and fair value of plan assets for the consolidated plans were $13.6 million and $0, respectively, as of October 31, 2016 compared to $14.9 million and $0, respectively, as of October 31, 2015.

The healthcare cost trend rates on gross eligible charges are as follows:



	Medical
Current trend rate	7.2	%
Ultimate trend rate	5.0	%
Year ultimate trend rate reached (South Africa)	2018
Year ultimate trend rate reached (US)	2026

A one-percentage point change in assumed health care cost trend rates would have the following effects (Dollars in thousands):



	1-Percentage-Point Increase		1-Percentage-Point Decrease
Effect on total of service and interest cost components	$	27	$	(23	)
Effect on postretirement benefit obligation	$	304	$	(261	)

Future benefit payments, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are expected to be as follows (Dollars in millions):



Year	Expected benefit payments
2017	$	1.3
2018	1.3
2019	1.2
2020	1.1
2021	1.1
2022-2026	4.7