PENSION AND PROFIT SHARING PLANS AND ARRANGEMENTS

Defined Benefit Plans

The Company provides substantially all domestic and foreign employees with retirement benefits. Funding policy for domestic plans, which is primarily comprised of a cash balance pension plan, is in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”). For foreign plans, funding is determined primarily by local tax laws and other regulations. Pension costs charged to operations totaled $31,288, $34,633 and $35,188 in fiscal years 2014, 2013 and 2012, respectively (these amounts included $1,737 and $735, of pension cost that have been recorded in discontinued operations in fiscal years 2013 and 2012, respectively).

Pension Plan Results for Defined Benefit Plans

The following table reflects the change in benefit obligations, change in plan assets and funded status for these plans:



	U.S. Plans						Foreign Plans						Total
	2014			2013			2014			2013			2014			2013
Change in benefit obligation:
Benefit obligation - beginning of year	$	285,360		$	319,579		$	395,648		$	392,301		$	681,008		$	711,880
Curtailments and settlements	—			(15,477		)	(168		)	(7,243		)	(168		)	(22,720		)
Service cost	8,679			10,590			4,005			4,504			12,684			15,094
Interest cost	12,110			10,469			17,377			15,847			29,487			26,316
Plan amendments	73			471			—			—			73			471
Actuarial (gain) loss	2,843			(32,170		)	5,483			20,763			8,326			(11,407		)
Total benefits paid	(20,300		)	(8,102		)	(17,467		)	(23,281		)	(37,767		)	(31,383		)
Effect of exchange rates	—			—			29,334			(7,243		)	29,334			(7,243		)
Benefit obligation – end of year	288,765			285,360			434,212			395,648			722,977			681,008



Change in plan assets (a):
Fair value of plan assets – beginning of year	146,718			142,398			296,524			283,434			443,242			425,832
Curtailments and settlements	—			(14,271		)	(168		)	(353		)	(168		)	(14,624		)
Actual return on plan assets	19,685			17,854			14,796			30,118			34,481			47,972
Company contributions	17,160			8,839			30,398			18,946			47,558			27,785
Benefits paid from plan assets	(20,300		)	(8,102		)	(17,467		)	(23,281		)	(37,767		)	(31,383		)
Effect of exchange rates	—			—			27,278			(12,340		)	27,278			(12,340		)
Fair value of plan assets - end of year	163,263			146,718			351,361			296,524			514,624			443,242
Funded status (a)	$	(125,502	)	$	(138,642	)	$	(82,851	)	$	(99,124	)	$	(208,353	)	$	(237,766	)



Accumulated benefit obligation	$	271,840	$	268,138	$	426,212	$	387,681	$	698,052	$	655,819
Plans with accumulated benefit obligations in excess of plan assets consist of the following:
Accumulated benefit obligation	$	149,702	$	268,138	$	102,037	$	359,011	$	251,739	$	627,149
Projected benefit obligation	154,799		285,360		108,397		365,145		263,196		650,505
Plan assets at fair value	40,542		146,718		20,002		265,366		60,544		412,084

(a)

The Company has certain supplemental defined benefit plans, which provide benefits to eligible executives in the U.S. and employees abroad for which the above tables do not include certain Company assets relating to these plans of $67,878 and $70,335 for the U.S. plans and $18,102 and $18,111 for the foreign plans as of July 31, 2014 and July 31, 2013, respectively. Liabilities, included in the tables above, related to these plans were $111,886 and $111,590 for the U.S. plans and $72,332 and $65,428 for the foreign plans as of July 31, 2014 and July 31, 2013, respectively.



	U.S. Plans						Foreign Plans						Total
	2014			2013			2014			2013			2014			2013
Amounts recognized in the balance sheet consist of:
Non-current assets	$	—		$	—		$	5,545		$	655		$	5,545		$	655
Current liabilities	(6,798		)	(6,308		)	(981		)	(913		)	(7,779		)	(7,221		)
Non-current liabilities	(118,704		)	(132,334		)	(87,415		)	(98,866		)	(206,119		)	(231,200		)
Net amount recognized	$	(125,502	)	$	(138,642	)	$	(82,851	)	$	(99,124	)	$	(208,353	)	$	(237,766	)

Net periodic benefit cost for the Company’s defined benefit pension plans includes the following components:



	U.S. Plans									Foreign Plans									Total
	2014			2013			2012			2014			2013			2012			2014			2013			2012
Service cost	$	8,679		$	10,590		$	8,924		$	4,005		$	4,504		$	4,726		$	12,684		$	15,094		$	13,650
Interest cost	12,110			10,469			12,722			17,377			15,847			18,100			29,487			26,316			30,822
Expected return on plan assets	(9,298		)	(9,533		)	(9,212		)	(14,260		)	(16,100		)	(15,582		)	(23,558		)	(25,633		)	(24,794		)
Amortization of prior service cost/(credit)	1,580			1,571			1,779			(37		)	(56		)	(93		)	1,543			1,515			1,686
Amortization of actuarial loss	5,377			9,644			7,998			5,723			5,523			5,237			11,100			15,167			13,235
(Gain)/loss due to curtailments and settlements	—			2,690			—			32			(516		)	589			32			2,174			589
Net periodic benefit cost	$	18,448		$	25,431		$	22,211		$	12,840		$	9,202		$	12,977		$	31,288		$	34,633		$	35,188

Other changes in plan assets and benefit obligations recognized in other comprehensive income for the year ending July 31, 2014 are as follows:



	U.S. Plans			Foreign Plans			Total
Net actuarial (gain)/loss	$	(7,544	)	$	4,947		$	(2,597	)
Recognized actuarial loss	(5,377		)	(5,723		)	(11,100		)
Prior service cost	73			—			73
Recognized prior service (cost)/credit	(1,580		)	37			(1,543		)
Effect of exchange rates and other items on amounts included in accumulated other comprehensive income	(87		)	8,845			8,758
Total recognized in other comprehensive (income)/loss, before tax effects	$	(14,515	)	$	8,106		$	(6,409	)
Total recognized in other comprehensive (income)/loss, net of tax effects	$	(9,290	)	$	5,359		$	(3,931	)
Total recognized in net periodic benefit cost and other comprehensive (income)/loss, before tax effects	$	3,933		$	20,946		$	24,879
Total recognized in net periodic benefit cost and other comprehensive (income)/loss, net of tax effects	$	2,517		$	14,733		$	17,250

Amounts recognized in accumulated other comprehensive income (before tax effects) as of July 31, 2014 are as follows:



	U.S. Plans		Foreign Plans		Total
Prior service cost	$	6,045	$	480	$	6,525
Net actuarial loss	56,419		116,150		172,569
Total amounts recognized in accumulated other comprehensive income	$	62,464	$	116,630	$	179,094

Amounts recognized in accumulated other comprehensive income (before tax effects) as of July 31, 2013 are as follows:



	U.S. Plans		Foreign Plans		Total
Prior service cost	$	7,552	$	393	$	7,945
Net actuarial loss	69,427		108,131		177,558
Total amounts recognized in accumulated other comprehensive income	$	76,979	$	108,524	$	185,503

Amounts in accumulated other comprehensive income expected to be amortized as components of net periodic benefit cost during fiscal year 2015 are as follows:



	U.S. Plans		Foreign Plans		Total
Prior service cost	$	1,458	$	3	$	1,461
Net actuarial loss	$	4,075	$	5,676	$	9,751

Plan Assumptions

The following table provides the weighted-average assumptions used to determine benefit obligations and net periodic benefit cost:



	U.S. Plans						Foreign Plans
	2014		2013		2012		2014		2013		2012
Assumptions used to determine benefit obligations
Discount rate	4.20	%	4.40	%	3.40	%	3.85	%	4.18	%	4.10	%
Rate of compensation increase	3.43	%	3.43	%	3.45	%	3.06	%	3.15	%	3.18	%
Assumptions used to determine net periodic benefit cost
Discount rate	4.40	%	3.40	%	5.00	%	4.18	%	4.10	%	4.90	%
Expected long-term rate of return on plan assets	6.75	%	6.75	%	7.00	%	4.57	%	5.69	%	5.88	%
Rate of compensation increase	3.43	%	3.45	%	4.61	%	3.15	%	3.18	%	3.18	%

The Company determines its actuarial assumptions on an annual basis. To develop the expected long-term rate of return on plan assets assumption, the Company considers the current level of expected returns on risk free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based upon the target asset allocation to develop the expected long-term rate of return on plan assets assumption for the portfolio.

Plan Assets and Investment Policies

The Company’s investment objective for defined benefit plan assets is to meet the plans’ benefit obligations, while preserving plan assets. The investment strategies focus on asset class diversification, liquidity to meet benefit payments and an appropriate balance of long-term return and risk. Plan assets are diversified across several investment managers and are generally invested in liquid funds that track broad market equity and bond indices. The target allocations for the plan assets (based on a weighted average) are 32% equity securities, 31% corporate and government securities, 37% to all other types of investments. Equity securities include investments in domestic and international companies. Fixed income securities include corporate bonds of companies from diversified industries and U.S. and foreign government treasury securities. Other types of investments include investments in a limited partnership, insurance contracts, commingled funds (which primarily represent investments in common collective trusts and fund of funds) and a longevity derivative which follow several different strategies. Plan fiduciaries oversee the investment allocation process, which includes selecting investment managers, commissioning periodic asset-liability studies, setting long-term strategic targets and monitoring asset allocations.

The following tables present, for each of the fair value hierarchy levels (as defined in Note 9, Fair Value Measurements) the Company’s U.S. and Foreign defined benefit net pension plan assets as of July 31, 2014 and July 31, 2013:



	Fair Value Measurements
	As of July 31, 2014		Level 1		Level 2		Level 3
U.S. Plans
Assets
Investments
Equity securities	$	97,035	$	97,035	$	—	$	—
Debt securities:
Federal agency	2,020		—		2,020		—
Mortgage/ asset-backed	15,463		—		15,463		—
Corporate	18,212		—		18,212		—
U.S. Treasury	5,205		—		5,205		—
Other investments:
Limited partnership	8,764		—		—		8,764
Commingled funds	17,881		—		17,881		—
Total investments	164,580		97,035		58,781		8,764
Other receivables	—		—		—		—
Total assets	164,580		97,035		58,781		8,764
Liabilities
Payables	1,317		1,317		—		—
Total liabilities	1,317		1,317		—		—
Net U.S. pension assets	$	163,263	$	95,718	$	58,781	$	8,764
Foreign Plans
Cash equivalents	$	19,742	$	19,742	$	—	$	—
Equity securities	70,801		70,801		—		—
Debt securities:
Corporate	122,991		—		122,991		—
Government bonds	15,333		—		15,333		—
Other investments:
Commingled funds	97,250		—		96,175		1,075
Insurance contracts	14,057		—		—		14,057
Real estate funds	14,467		—		—		14,467
Total foreign pension assets	354,641		90,543		234,499		29,599
Liabilities
Longevity derivative	3,280		$	—	$	—	$	3,280
Total liabilities	3,280		—		—		3,280
Net foreign pension assets	$	351,361	$	90,543	$	234,499	$	26,319
Total pension assets	$	514,624	$	186,261	$	293,280	$	35,083



	Fair Value Measurements
	As of July 31, 2013		Level 1		Level 2		Level 3
U.S. Plans
Assets
Investments
Equity securities	$	88,566	$	88,566	$	—	$	—
Debt securities:
Federal agency	4,801		—		4,801		—
Mortgage/ asset-backed	14,098		—		14,098		—
Corporate	16,895		—		16,895		—
U.S. Treasury	2,714		—		2,714		—
Other investments:
Limited partnership	8,794		—		—		8,794
Commingled funds	13,496		—		13,496		—
Total investments	149,364		88,566		52,004		8,794
Other receivables	942		942		—		—
Total assets	150,306		89,508		52,004		8,794
Liabilities
Payables	3,588		3,588		—		—
Total liabilities	3,588		3,588		—		—
Net U.S. pension assets	$	146,718	$	85,920	$	52,004	$	8,794
Foreign Plans
Cash equivalents	$	25,442	$	25,442	$	—	$	—
Equity securities	70,297		70,297		—		—
Debt securities:	—
Corporate	54,280		—		54,280		—
Government bonds	28,813		—		28,813		—
Other investments:
Commingled funds	95,982		—		95,057		925
Insurance contracts	13,483		—		—		13,483
Real estate funds	8,685		—		—		8,685
Total foreign pension assets	296,982		95,739		178,150		23,093
Liabilities
Longevity derivative	458		—		—		458
Total liabilities	458		—		—		458
Net foreign pension assets	$	296,524	$	95,739	$	178,150	$	22,635
Total pension assets	$	443,242	$	181,659	$	230,154	$	31,429

The following tables present an analysis of changes during fiscal year 2014 and fiscal year 2013 in Level 3 plan assets, by plan asset class, for U.S. and Foreign pension plans using significant unobservable inputs to measure fair value:



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Limited partnership			Commingled funds		Insurance contracts			Real estate funds		Longevity derivative			Total
Beginning Balance at July 31, 2013	$	8,794		$	925	$	13,483		$	8,685	$	(458	)	$	31,429
Actual return on plan assets:
Assets held, end of year	(30		)	24		463			512		(2,691		)	(1,722		)
Assets sold during the period	—			—		—			164		—			164
Purchases, sales, and settlements, net	—			118		(61		)	4,010		—			4,067
Exchange rate changes	—			8		172			1,096		(131		)	1,145
Ending balance at July 31, 2014	$	8,764		$	1,075	$	14,057		$	14,467	$	(3,280	)	$	35,083



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Limited partnership			Commingled funds			Insurance contracts		Real estate funds			Longevity derivative			Total
Beginning Balance at July 31, 2012	$	9,634		$	10,910		$	12,180	$	8,701		$	(612	)	$	40,813
Actual return on plan assets:
Assets held, end of year	364			46			184		253			141			988
Assets sold during the period	—			183			—		—			—			183
Purchases, sales, and settlements, net	(1,204		)	(10,256		)	163		—			—			(11,297		)
Exchange rate changes	—			42			956		(269		)	13			742
Ending balance at July 31, 2013	$	8,794		$	925		$	13,483	$	8,685		$	(458	)	$	31,429

The Plan’s investments in cash equivalents and equity securities are valued using quoted market prices and, as such, are classified within Level 1 of the fair value hierarchy.

The fair value of the Plan’s investments in debt securities, have been valued utilizing third party pricing services and verified by management. The pricing services use inputs to determine fair value which are derived from observable market sources including reportable trades, benchmark curves, credit spreads, broker/dealer quotes, bids, offers, and other industry and economic events. These investments are included in Level 2 of the fair value hierarchy.

The fair value of the Plan’s other investments included in Level 2 of the fair value hierarchy have been reported primarily using the net asset value per share of the investment as the practical expedient for measuring fair value as permitted for these types of investments.

The fair value of the Plan’s other investments included in Level 3 of the fair value hierarchy have been valued using unobservable inputs and in some cases are subject to various redemption restrictions.

Other receivables and payables are valued at cost, which approximates fair value.

Cash Flows

Management’s estimate of the Company’s cash requirements for the defined benefit plans for the year ending July 31, 2015 is $14,276. This is comprised of expected benefit payments of $10,368, which will be paid directly to plan participants from Company assets, as well as expected Company contributions of $3,908. Expected contributions are dependent on many variables, including the variability of the market value of the assets as compared to the obligation and other market or regulatory conditions. Accordingly, actual funding may differ from current estimates.

The following table provides the pension benefits expected to be paid to participants in the next ten fiscal years, which include payments funded from the Company’s assets, as discussed above, as well as payments paid from plan assets:



Expected pension benefit payments
2015	$	36,920
2016	37,354
2017	34,760
2018	36,233
2019	39,969
2020-2024	206,702

Defined Contribution Plans

The Company’s 401(k) and profit sharing plan covers substantially all domestic employees of the Company and its participating subsidiaries (the “Plan”), other than those employees covered by a union retirement plan. The Plan provides that participants may voluntarily contribute a percentage of their compensation and the Company will make a matching contribution equal to 100% of the first 3% of each participant’s contributions. In addition, in fiscal year 2013, the Company implemented a supplementary defined contribution plan for a limited group of employees. The expense associated with these plans for fiscal years 2014, 2013, and 2012 was $7,524, $7,127 and $5,903, respectively.

The Company and its subsidiaries also participate in defined contribution pension plans primarily for the benefit of certain foreign employees. The expense associated with these plans was $19,825, $17,015 and $18,778 for fiscal years 2014, 2013 and 2012, respectively.