Retirement, pension and other postretirement plans

12 Months Ended

Oct. 31, 2011

Retirement, pension and other postretirement plans [Abstract]

Retirement, pension and other postretirement plans

Note 3 — Retirement, pension and other postretirement plans

Retirement plans — We have funded contributory retirement plans covering certain employees. Our contributions are primarily determined by the terms of the plans, subject to the limitation that they shall not exceed the amounts deductible for income tax purposes. We also sponsor unfunded contributory supplemental retirement plans for certain employees. Generally, benefits under these plans vest gradually over a period of approximately three years from date of employment, and are based on the employee’s contribution. The expense applicable to retirement plans for 2011, 2010 and 2009 was approximately $8,594, $7,945 and $7,703, respectively.

Pension plans — We have various pension plans covering a portion of our United States and international employees. Pension plan benefits are generally based on years of employment and, for salaried employees, the level of compensation. Actuarially determined amounts are contributed to United States plans to provide sufficient assets to meet future benefit payment requirements. We also sponsor an unfunded supplemental pension plan for certain employees. International subsidiaries fund their pension plans according to local requirements.

A reconciliation of the benefit obligations, plan assets, accrued benefit cost and the amount recognized in financial statements for pension plans is as follows:

	United States						International
	2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	237,370		$	224,966		$	71,936		$	61,631
Service cost		6,058			5,997			2,097			1,632
Interest cost		12,008			11,883			2,973			2,791
Participant contributions		—			—			124			128
Plan amendments		5			643			(1,210	)		—
Addition of plan from business combination		—			—			—			1,241
Foreign currency exchange rate change		—			—			345			(448	)
Actuarial (gain) loss		21,289			18,336			(2,567	)		7,966
Benefits paid		(7,781	)		(24,455	)		(2,337	)		(3,005	)
Benefit obligation at end of year	$	268,949		$	237,370		$	71,361		$	71,936
Change in plan assets:
Beginning fair value of plan assets	$	175,864		$	113,356		$	29,799		$	28,833
Actual return on plan assets		15,946			17,266			672			994
Company contributions		672			69,697			3,788			3,446
Participant contributions		—			—			124			128
Foreign currency exchange rate change		—			—			121			(597	)
Benefits paid		(7,781	)		(24,455	)		(2,337	)		(3,005	)
Ending fair value of plan assets	$	184,701		$	175,864		$	32,167		$	29,799
Funded status at end of year	$	(84,248	)	$	(61,506	)	$	(39,194	)	$	(42,137	)
Amounts recognized in financial statements:
Noncurrent asset	$	—		$	—		$	191		$	497
Accrued benefit liability		(571	)		(467	)		(4	)		(346	)
Long-term pension and retirement obligations		(83,677	)		(61,039	)		(39,381	)		(42,288	)
Total amount recognized in financial statements	$	(84,248	)	$	(61,506	)	$	(39,194	)	$	(42,137	)

Benefits paid pursuant to distribution provisions of our United States plans for 2010 included lump sum settlement payments of $17,151.

	United States				International
	2011		2010		2011			2010
Amounts recognized in accumulated other comprehensive (gain) loss:
Net actuarial (gain) loss	$	136,927	$	123,449	$	14,937		$	17,486
Prior service cost (credit)		2,035		2,695		(1,201	)		14
Accumulated other comprehensive (gain) loss	$	138,962	$	126,144	$	13,736		$	17,500
Amounts expected to be recognized during next fiscal year:
Amortization of net actuarial (gain) loss	$	11,356	$	7,226	$	579		$	857
Amortization of prior service cost (credit)		667		666		(98	)		5
Total	$	12,023	$	7,892	$	481		$	862

The following table summarizes the changes in accumulated other comprehensive (gain) loss:

	United States						International
	2011			2010			2011			2010
Balance at beginning of year	$	126,144		$	124,496		$	17,500		$	9,569
Net (gain) loss arising during the year		20,917			15,787			(1,773	)		8,319
Prior service cost (credit) arising during the year		5			643			(1,210	)		—
Net gain (loss) recognized during the year		(7,438	)		(6,181	)		(858	)		(369	)
Settlement loss		—			(8,022	)		—			(190	)
Prior service (cost) credit recognized during the year		(666	)		(579	)		(5	)		(49	)
Exchange rate effect during the year		—			—			82			220
Balance at end of year	$	138,962		$	126,144		$	13,736		$	17,500

Information regarding the accumulated benefit obligation is as follows:

	United States				International
	2011		2010		2011		2010
For all plans:
Accumulated benefit obligation	$	261,767	$	223,966	$	56,529	$	55,865
For plans with benefit obligations in excess of plan assets:
Projected benefit obligation		268,949		237,370		64,945		60,050
Accumulated benefit obligation		261,767		223,966		54,749		49,631
Fair value of plan assets		184,701		175,864		30,185		23,047

Net pension benefit costs include the following components:

	United States									International
	2011			2010			2009			2011			2010			2009
Service cost	$	6,058		$	5,997		$	4,177		$	2,097		$	1,632		$	1,315
Interest cost		12,008			11,883			11,897			2,973			2,791			2,625
Expected return on plan assets		(15,575	)		(14,716	)		(11,982	)		(1,466	)		(1,348	)		(1,210	)
Amortization of prior service cost (credit)		666			579			603			5			49			49
Amortization of net actuarial (gain) loss		7,438			6,181			854			858			369			(19	)
Settlement loss		—			8,022			1,629			—			190			287
Total benefit cost	$	10,595		$	17,946		$	7,178		$	4,467		$	3,683		$	3,047

Net periodic pension cost for 2010 and 2009 included settlement losses of $8,212 and $1,916, respectively, due to lump sum retirement payments.

The weighted average assumptions used in the valuation of pension benefits were as follows:

	United States									International
	2011			2010			2009			2011			2010			2009
Assumptions used to determine benefit obligations at October 31:
Discount rate		4.46	%		5.21	%		5.50	%		4.43	%		4.17	%		4.78	%
Rate of compensation increase		3.20			3.30			3.30			3.16			3.21			2.86
Assumptions used to determine net benefit costs for the years ended October 31:
Discount rate		5.21			5.50			8.00			4.17			4.78			5.87
Expected return on plan assets		8.25			8.51			8.48			4.84			4.85			5.04
Rate of compensation increase		3.30			3.30			3.30			3.21			2.86			3.45

The amortization of prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the plans.

In determining the expected return on plan assets, we consider both historical performance and an estimate of future long-term rates of return on assets similar to those in our plans. We consult with and consider the opinions of financial and other professionals in developing appropriate return assumptions.

Economic assumptions have a significant effect on the amounts reported. The effect of a one percent change in the discount rate, expected return on assets and compensation increase is shown in the table below. Bracketed numbers represent decreases in expense and obligation amounts.

	United States						International
	1% Point Increase			1% Point Decrease			1% Point Increase			1% Point Decrease
Discount rate:
Effect on total service and interest cost components in 2011	$	(3,107	)	$	3,696		$	(324	)	$	405
Effect on pension obligation as of October 31, 2011	$	(34,776	)	$	43,229		$	(11,917	)	$	13,847
Expected return on assets:
Effect on total service and interest cost components in 2011	$	(1,889	)	$	1,888		$	(302	)	$	301
Effect on pension obligation as of October 31, 2011	$	—		$	—		$	—		$	—
Compensation increase:
Effect on total service and interest cost components in 2011	$	2,816		$	(2,291	)	$	462		$	(420	)
Effect on pension obligation as of October 31, 2011	$	14,649		$	(12,040	)	$	8,575		$	(7,062	)

The allocation of pension plan assets as of October 31, 2011 and 2010 is as follows:

	United States				International
	2011		2010		2011		2010
Asset Category
Equity securities		22%		83%		—%		—%
Debt securities		33		16		—		—
Insurance contracts		—		—		58		59
Pooled investment funds		44		—		41		40
Other		1		1		1		1
Total		100%		100%		100%		100%

Our investment objective for defined benefit plan assets is to meet the plans’ benefit obligations, while minimizing the potential for future required plan contributions.

Our United States plans comprise 85 percent of the worldwide pension assets. The investment strategies focus on asset class diversification, liquidity to meet benefit payments and an appropriate balance of long-term investment return and risk. Target ranges for asset allocations are determined by dynamically matching the actuarial projections of the plans’ future liabilities and benefit payments with expected long-term rates of return on the assets, taking into account investment return volatility and correlations across asset classes. The current target in “return-seeking assets” is 50 percent and 50 percent in fixed income. Plan assets are diversified across several investment managers and are generally invested in liquid funds that are selected to track broad market equity and bond indices. Investment risk is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and continual monitoring of investment managers’ performance relative to the investment guidelines established with each investment manager.

Our international plans comprise 15 percent of the worldwide pension assets. Asset allocations are developed on a country-specific basis. Our investment strategy is to cover pension obligations with insurance contracts or to employ independent managers to invest the assets.

The fair values of our pension plan assets at October 31, 2011 by asset category are in the table below.

	United States								International
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash	$	618	$	618	$	—	$	—	$	322	$	322	$	—	$	—
Money market funds		1,845		1,845		—		—		—		—		—		—
Equity securities:
Basic materials		5,081		5,081		—		—		—		—		—		—
Consumer goods		5,942		5,942		—		—		—		—		—		—
Financial		6,989		6,989		—		—		—		—		—		—
Healthcare		4,062		4,062		—		—		—		—		—		—
Industrial goods		3,993		3,993		—		—		—		—		—		—
Technology		4,767		4,767		—		—		—		—		—		—
Utilities		1,578		1,578		—		—		—		—		—		—
Mutual funds		7,353		7,353		—		—		—		—		—		—
Fixed income securities:
U.S. Government		24,224		2,445		21,779		—		—		—		—		—
Corporate		35,514		—		35,514		—		—		—		—		—
Other		826		—		826		—		—		—		—		—
Other types of investments:
Insurance contracts		—		—		—		—		18,501		—		—		18,501
Pooled investment funds		81,062		—		81,062		—		13,344		—		13,344		—
Other		847		847		—		—		—		—		—		—
	$	184,701	$	45,520	$	139,181	$	—	$	32,167	$	322	$	13,344	$	18,501

The fair values of our pension plan assets at October 31, 2010 by asset category are in the table below.

	United States								International
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash	$	580	$	580	$	—	$	—	$	—	$	—	$	—	$	—
Money market funds		19,224		19,224		—		—		309		309		—		—
Equity securities:
Basic materials		6,776		6,776		—		—		—		—		—		—
Consumer goods		7,789		7,789		—		—		—		—		—		—
Financial		9,768		9,768		—		—		—		—		—		—
Healthcare		4,483		4,483		—		—		—		—		—		—
Industrial goods		4,623		4,623		—		—		—		—		—		—
Technology		4,339		4,339		—		—		—		—		—		—
Utilities		1,839		1,839		—		—		—		—		—		—
Mutual funds		87,339		87,339		—		—		—		—		—		—
Fixed income securities:
U.S. Government		14,329		4,068		10,261		—		—		—		—		—
Corporate		14,489		—		14,489		—		—		—		—		—
Other		57		—		57		—		—		—		—		—
Other types of investments:
Insurance contracts		—		—		—		—		17,699		—		—		17,699
Pooled investment funds		—		—		—		—		11,791		—		11,791		—
Other		229		229		—		—		—		—		—		—
	$	175,864	$	151,057	$	24,807	$	—	$	29,799	$	309	$	11,791	$	17,699

At October 31, 2011 and 2010, the pension plans did not have any investment in our common shares.

The inputs and methodology used to measure fair value of plan assets are consistent with those described in Note 18. Following are the valuation methodologies used to measure these assets:

• Money market funds — Money market funds are public investment vehicles that are valued with a net asset value of one dollar. This is a quoted price in an active market and is classified as Level 1.

• Equity securities — Common stocks are valued at the closing price reported on the active market on which the individual securities are traded and are classified as Level 1. Mutual funds are valued at the net asset values of the shares at year-end, as determined by the closing price reported on the active market on which the individual securities are traded and are classified as Level 1.

• Fixed income securities — U.S. Treasury bills reflect the closing price on the active market in which the securities are traded and are classified as Level 1. Securities of U.S. agencies are valued using bid evaluations and a classified as Level 2. Corporate fixed income securities are valued using evaluated prices, such as dealer quotes, bids and offers and are therefore classified as Level 2.

• Insurance contracts — Insurance contracts are investments with various insurance companies. The assets are valued at the fair value as reported by the insurance companies. These contracts do not hold any specific assets. These investments are classified as Level 3.

• Pooled investment funds — These are public investment vehicles valued using the net asset value. The net asset value is based on the value of the assets owned by the plan, less liabilities. These investments are not quoted on an active exchange and are classified as Level 2.

The following table sets forth a summary of changes in fair value of the pension plan investments classified as Level 3 for the years ended October 31, 2011 and 2010:

	2011		2010
Balance at beginning of year	$	17,699	$	17,600
Net unrealized gains		55		692
Purchases, sales, issuances and settlements, net		679		(231	)
Transfers in (out)		—		—
Foreign currency translation		68		(362	)
Balance at end of year	$	18,501	$	17,699

Contributions to pension plans in 2012 are estimated to be approximately $12,500.

Retiree pension benefit payments, which reflect expected future service, are anticipated to be paid as follows:

Year	United States		International
2012	$	12,762	$	1,942
2013		11,443		1,989
2014		12,669		2,399
2015		13,982		2,840
2016		14,243		2,288
2017-2021		92,072		17,271

Contributions and retiree pension benefit payments for 2012 include amounts related to the termination of a plan.

Other postretirement plans — We have an unfunded postretirement benefit plan covering the majority of our United States employees. Employees hired after January 1, 2002, are not eligible to participate in this plan. The plan provides medical and life insurance benefits. The plan is contributory, with retiree contributions in the form of premiums that are adjusted annually, and contains other cost-sharing features, such as deductibles and coinsurance. We also sponsor an unfunded, non-contributory postretirement benefit plan that provides medical and life insurance benefits for certain international employees.

A reconciliation of the benefit obligations, accrued benefit cost and the amount recognized in financial statements for other postretirement plans is as follows:

	United States						International
	2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	55,599		$	52,858		$	659		$	605
Service cost		1,122			837			31			29
Interest cost		2,932			2,504			41			45
Participant contributions		1,307			1,143			—			—
Plan amendment		—			(1,171	)		—			—
Foreign currency exchange rate change		—			—			13			37
Actuarial (gain) loss		14,409			1,326			(62	)		(53	)
Benefits paid		(1,977	)		(1,898	)		(4	)		(4	)
Benefit obligation at end of year	$	73,392		$	55,599		$	678		$	659
Change in plan assets:
Beginning fair value of plan assets	$	—		$	—		$	—		$	—
Company contributions		670			755			4			4
Participant contributions		1,307			1,143			—			—
Benefits paid		(1,977	)		(1,898	)		(4	)		(4	)
Ending fair value of plan assets	$	—		$	—		$	—		$	—
Funded status at end of year	$	(73,392	)	$	(55,599	)	$	(678	)	$	(659	)
Amounts recognized in financial statements:
Accrued benefit liability	$	(2,123	)	$	(2,339	)	$	(4	)	$	(4	)
Long-term postretirement obligations		(71,269	)		(53,260	)		(674	)		(655	)
Total amount recognized in financial statements	$	(73,392	)	$	(55,599	)	$	(678	)	$	(659	)

The 2010 Amendment noted in the preceding table relates to changes in deductibles and out-of-pocket maximums and changes in limits for certain benefits.

	United States						International
	2011			2010			2011			2010
Amounts recognized in accumulated other comprehensive (gain) loss:
Net actuarial (gain) loss	$	37,690		$	24,887		$	(260	)	$	(203	)
Prior service cost (credit)		(2,316	)		(3,464	)		—			—
Accumulated other comprehensive (gain) loss	$	35,374		$	21,423		$	(260	)	$	(203	)
Amounts expected to be recognized during next fiscal year:
Amortization of net actuarial (gain) loss	$	2,681		$	1,498		$	(14	)	$	(5	)
Amortization of prior service cost (credit)		(584	)		(1,147	)		—			—
Total	$	2,097		$	351		$	(14	)	$	(5	)

The following table summarizes the changes in accumulated other comprehensive (gain) loss:

	United States						International
	2011			2010			2011			2010
Balance at beginning of year	$	21,423		$	21,291		$	(203	)	$	(146	)
Net (gain) loss arising during the year		14,410			1,326			(62	)		(53	)
Prior service cost (credit) arising during the year		—			(1,171	)		—			—
Net gain (loss) recognized during the year		(1,606	)		(1,170	)		8			5
Prior service credit (cost) recognized during the year		1,147			1,147			—			—
Exchange rate effect during the year		—			—			(3	)		(9	)
Balance at end of year	$	35,374		$	21,423		$	(260	)	$	(203	)

Net postretirement benefit costs include the following components:

	United States									International
	2011			2010			2009			2011			2010			2009
Service cost	$	1,122		$	837		$	589		$	31		$	29		$	23
Interest cost		2,932			2,504			2,926			41			44			35
Amortization of prior service cost (credit)		(1,147	)		(1,147	)		(1,009	)		—			—			—
Amortization of net actuarial (gain) loss		1,606			1,170			765			(8	)		(5	)		(11	)
Total benefit cost	$	4,513		$	3,364		$	3,271		$	64		$	68		$	47

The weighted average assumptions used in the valuation of postretirement benefits were as follows:

	United States									International
	2011			2010			2009			2011			2010			2009
Assumptions used to determine benefit obligations at October 31:
Discount rate		4.50	%		5.25	%		5.50	%		5.85	%		5.75	%		6.75	%
Health care cost trend rate		9.36			9.00			8.25			7.00			6.80			7.50
Rate to which health care cost trend rate is assumed to decline (ultimate trend rate)		5.00			5.00			4.50			3.50			4.80			4.80
Year the rate reaches the ultimate trend rate		2016			2020			2015			2031			2013			2013
Assumption used to determine net benefit costs for the years ended October 31:
Discount rate		5.25	%		5.50	%		8.00	%		5.75	%		6.75	%		7.70	%

The discount rate and the health care cost trend rate assumptions have a significant effect on the amounts reported. For example, a one-percentage point change in the discount rate and the assumed health care cost trend rate would have the following effects:

	United States						International
	1% Point Increase			1% Point Decrease			1% Point Increase			1% Point Decrease
Discount rate:
Effect on total service and interest cost components in 2011	$	(628	)	$	753		$	(9	)	$	11
Effect on postretirement obligation as of October 31, 2011	$	(10,119	)	$	12,871		$	(135	)	$	181
Health care trend rate:
Effect on total service and interest cost components in 2011	$	871		$	(688	)	$	19		$	(14	)
Effect on postretirement obligation as of October 31, 2011	$	11,804		$	(9,476	)	$	174		$	(132	)

Contributions to postretirement plans in 2012 are estimated to be approximately $1,900.

Retiree postretirement benefit payments are anticipated to be paid as follows:

	United States				International
Year	With Medicare Part D Subsidy		Without Medicare Part D Subsidy
2012	$	2,123	$	1,872	$	4
2013		2,316		2,013		4
2014		2,693		2,345		8
2015		2,955		2,556		16
2016		3,238		2,787		17
2017-2021		18,483		15,279		115