Thousands of dollars, except per-share amounts and numbers of shares

The Company has defined benefit pension plans covering substantially all of its employees in the United States and certain foreign locations. The Company also provides certain postretirement healthcare and life insurance benefits to qualifying domestic retirees. Postretirement healthcare and life insurance benefit plans in foreign countries are not material. The measurement date used for the Company’s employee benefit plans is September 30.

     The Company contributed $37,468 and $112,132 to increase the funding for its pension plans during fiscal 2004 and 2003, respectively.

     The change in benefit obligation, change in plan assets, funded status and amounts recognized in the consolidated balance sheets at September 30, 2004 and 2003 for these plans were as follows:

	Pension Plans						Other Postretirement Benefits
	2004			2003			2004			2003
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,058,645		$	852,922		$	255,106		$	222,374
Service cost		57,013			44,798			3,510			3,159
Interest cost		62,825			54,072			14,492			14,484
Plan amendments		761			894			—			—
Benefits paid		(55,401	)		(49,891	)		(18,282	)		(15,449	)
Actuarial loss		46,726			129,493			35,261			30,538
Other, includes translation		14,825			26,357			(26,409)	(A)		—
Benefit obligation at end of year	$	1,185,394		$	1,058,645		$	263,678		$	255,106
Change in plan assets:
Fair value of plan assets at beginning of year	$	685,585		$	519,161		$	—		$	—
Actual return on plan assets		56,018			82,973			—			—
Employer contribution		37,468			112,132			—			—
Benefits paid		(55,401	)		(49,891	)		—			—
Other, includes translation		11,497			21,210			—			—
Fair value of plan assets at end of year	$	735,167		$	685,585		$	—		$	—
Funded status:
Unfunded benefit obligation	$	(450,227	)	$	(373,060	)	$	(263,678	)	$	(255,106	)
Unrecognized net transition obligation		1,150			1,308			—			—
Unrecognized prior service cost		4,321			3,236			(25,386	)		(31,619	)
Unrecognized net actuarial loss		420,678			392,912			93,033			88,297
(Accrued) prepaid benefit cost	$	(24,078	)	$	24,396		$	(196,031	)	$	(198,428	)
Amounts recognized in the consolidated
balance sheets consisted of:
Prepaid benefit cost	$	25,857		$	13,684		$	—		$	—
Accrued benefit liability		(201,650	)		(132,220	)		(196,031	)		(198,428	)
Intangible asset		1,168			3,156			—			—
Accumulated other comprehensive loss
before income taxes		150,547			139,776			—			—
Net amount recognized	$	(24,078	)	$	24,396		$	(196,031	)	$	(198,428	)

(A) Relates to the adoption of FSP 106-2 as discussed in Note 2.

Foreign pension plan assets at fair value included in the preceding table were $207,765 and $169,473 at September 30, 2004 and 2003, respectively. The foreign pension plan projected ben-efit obligations were $279,029 and $232,560 at September 30, 2004 and 2003, respectively.

     The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $1,034,223, $796,256 and $597,155 respectively as of September 30, 2004 and $953,406, $721,805, and $591,921, respectively as of September 30, 2003.

Net pension and other postretirement expense included the following components:

	Pension Plans Other									Postretirement Benefits
	2004			2003			2002			2004			2003			2002
Components of net pension and other postretirement costs: Service cost	$	57,013		$	44,798		$	35,702		$	3,510		$	3,159		$	2,609
Interest cost		62,825			54,072			49,095			14,492			14,484			14,419
Expected return on plan assets		(51,923	)		(47,190	)		(52,560	)		—			—			—
Amortization of prior service cost		180			85			(136	)		(6,233	)		(6,233	)		(6,233	)
Amortization of loss		17,586			13,121			3,064			4,116			3,342			1,626
Amortization of net obligation		132			11			12			—			—			—
Net curtailment gain		(300	)		(147	)		—			—			—			—
Net pension and postretirement costs	$	85,513		$	64,750		$	35,177		$	15,885		$	14,752		$	12,421

     Net pension expense attributable to foreign plans included in the preceding table was $16,053, $13,302, and $8,478 in 2004, 2003, and 2002, respectively.

     The assumptions used in determining benefit obligations were as follows:

	Pension Plans						Other Postretirement Benefits
	2004			2003			2004			2003
Discount rate: U.S. plans		6.00	%		6.25	%		6.00	%		6.25	%
Foreign plans (average)		4.95	%		4.90	%		—			—
Expected return on plan assets (A): U.S. plans		8.00	%		8.00	%		—			—
Foreign plans (average)		6.60	%		6.72	%		—			—
Rate of compensation increase: U.S. plans		4.25	%		4.25	%		4.25	%		4.25	%
Foreign plans (average)		2.98	%		2.92	%		—			—

     At September 30, 2004 the assumed healthcare trend rates were 10% pre and post age 65, decreasing to an ultimate rate of 5% beginning in 2010. At September 30, 2003 the corresponding assumed healthcare trend rates were 9% pre and post age 65 and an ultimate rate of 5% beginning in 2008. A one percentage point increase in assumed healthcare cost trend rates in each year would increase the accumulated postretirement benefit obligation as of September 30, 2004 by $13,993 and the aggregate of the service cost and interest cost components of 2004 annual expense by $863. A one percentage point decrease in the assumed healthcare cost trend rates in each year would decrease the accumulated postretirement benefit obligation as of September 30, 2004 by $12,359 and the aggregate of the 2004 service cost and interest cost by $762.

     Benefit payments expected to be paid under the Company's defined benefit pension plans in the next 10 years follows:

Expected Benefit Payments
2005	$	48,592
2006		53,089
2007		58,232
2008		61,213
2009		68,066
2010–2014		410,075
Total	$	699,267

     The Company’s asset allocation for its defined benefit pension plans as of September 30 follows:

Asset Allocation
	2004			2003
Equity securities		66.9	%		67.5	%
Debt securities		30.1	%		28.9	%
Other		3.0	%		3.6	%
Total		100.0	%		100.0	%

Expected Funding

The Company’s funding policy for its defined benefit pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that management may determine to be appropriate considering the funded status of the plans, tax consequences, the cash flow generated by the Company and other factors. While management expects that the Company will not be required to fund any of its pension plans in 2005, the Company expects to make discretionary funding contributions to its pension plans in 2005 of $68 million.

Investment Strategy

The Company’s investment objective is to achieve superior returns on plan assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. The Company’s investments include a broad range of equity and fixed income securities. These investments are diversified in terms of U.S. and international equity securities, short-term and long-term securities, growth and value styles, as well as small and large capitalization stocks. The Company’s target allocation percentages are: U.S. equity securities (45%–50%), international securities (12%–18%), fixed-income securities (31%–39%) and cash (0%–3%). U.S. equity securities are held for their expected high return and excess return over inflation. International equity securities are held for their expected high return, as well as for diversification purposes. Fixed-income securities are held for diversification relative to equities. The plans may also hold cash to meet liquidity requirements. Due to short-term fluctuations in market conditions, allocation percentages may temporarily deviate from these target allocation percentages before a rebalancing occurs. Investment risks and returns are measured and monitored on an on-going basis through annual liability measurements and quarterly investment portfolio reviews to determine whether the asset allocation targets continue to represent an appropriate balance of expected risk and reward. Investments within asset classes are to be diversified to achieve broad market participation and to reduce the impact of individual managers or investments.

     The expected rate of return on plan assets is based upon management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected rates of return for the asset classes in which the plan’s assets are invested, as well as current economic and capital market conditions.

     The Company utilizes a service-based approach in applying the provisions of SFAS No. 112, “Employers’ Accounting for Postemployment Benefits,” for most of its postemployment benefits. Such an approach recognizes that actuarial gains and losses may result from experience that differs from baseline assumptions. Postemployment benefit costs were $18,971, $13,974, and $13,599 in 2004, 2003, and 2002, respectively.