Notes to Consolidated Financial Statements
Our pension expense is as follows:
| |
United States |
International |
| (millions) |
2005 |
|
2004 |
|
2003 |
|
2005 |
|
2004 |
|
2003 |
|
| Service cost |
$ 11.9 |
|
$ 11.6 |
|
$ 11.0 |
|
$ 5.6 |
|
$ 5.4 |
|
$ 4.6 |
|
| Interest costs |
20.7 |
|
19.8 |
|
19.3 |
|
7.5 |
|
6.7 |
|
5.4 |
|
| Expected return on |
|
|
|
|
|
|
|
|
|
|
|
|
| plan assets |
(20.3 |
) |
(18.6 |
) |
(17.0 |
) |
(6.9 |
) |
(7.0 |
) |
(6.7 |
) |
| Amortization of prior |
|
|
|
|
|
|
|
|
|
|
|
|
| service costs |
- |
|
- |
|
- |
|
.1 |
|
.1 |
|
.1 |
|
| Amortization of |
|
|
|
|
|
|
|
|
|
|
|
|
| transition assets |
- |
|
- |
|
- |
|
(.1 |
) |
(.1 |
) |
(.1 |
) |
| Curtailment loss |
- |
|
- |
|
- |
|
- |
|
- |
|
.1 |
|
| Recognized net |
|
|
|
|
|
|
|
|
|
|
|
|
| actuarial loss |
11.4 |
|
11.5 |
|
7.4 |
|
1.2 |
|
.6 |
|
- |
|
| Less: discontinued |
|
|
|
|
|
|
|
|
|
|
|
|
| operations |
- |
|
- |
|
(2.0 |
) |
- |
|
- |
|
- |
|
| |
$ 23.7 |
|
$ 24.3 |
|
$ 18.7 |
|
$ 7.4 |
|
$ 5.7 |
|
$ 3.4 |
|
Rollforwards of the benefit obligation, fair value of plan assets and a reconciliation of the pension plans' funded status at the measurement date, September 30, follow:
| |
United States
|
International
|
| (millions) |
2005
|
|
2004
|
|
2005
|
|
2004
|
|
| Change in benefit obligation |
|
|
|
|
|
|
|
|
|
|
|
|
| Benefit obligation at |
|
|
|
|
|
|
|
|
|
|
|
|
| beginning of year |
$ |
349.6 |
|
$ |
334.4 |
|
$ |
141.8 |
|
$ |
110.6 |
|
| Service cost |
|
11.9 |
|
|
11.6 |
|
|
5.6 |
|
|
5.4 |
|
| Interest costs |
|
20.7 |
|
|
19.8 |
|
|
7.5 |
|
|
6.7 |
|
| Employee contributions |
|
- |
|
|
- |
|
|
1.7 |
|
|
1.8 |
|
| Plan changes and other |
|
- |
|
|
- |
|
|
.4 |
|
|
(.9 |
) |
| Plan settlement |
|
- |
|
|
- |
|
|
(2.8 |
) |
|
- |
|
| Special termination benefits |
|
- |
|
|
- |
|
|
.5 |
|
|
- |
|
| Actuarial loss |
|
9.4 |
|
|
2.5 |
|
|
23.9 |
|
|
11.3 |
|
| Benefits paid |
|
(13.5 |
) |
|
(18.7 |
) |
|
(7.5 |
) |
|
(4.9 |
) |
| Foreign currency impact |
|
- |
|
|
- |
|
|
(10.0 |
) |
|
11.8 |
|
| Benefit obligation at |
|
|
|
|
|
|
|
|
|
|
|
|
| end of year |
$ |
378.1 |
|
$ |
349.6 |
|
$ |
161.1 |
|
$ |
141.8 |
|
| Change in fair value of plan assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of plan assets at |
|
|
|
|
|
|
|
|
|
|
|
|
| beginning of year |
$ |
237.7 |
|
$ |
205.4 |
|
$ |
90.9 |
|
$ |
73.0 |
|
| Actual return on plan assets |
|
25.2 |
|
|
27.1 |
|
|
15.8 |
|
|
7.5 |
|
| Employer contributions |
|
22.0 |
|
|
22.0 |
|
|
8.7 |
|
|
6.7 |
|
| Employee contributions |
|
- |
|
|
- |
|
|
1.7 |
|
|
1.8 |
|
| Plan settlement |
|
- |
|
|
- |
|
|
(2.8 |
) |
|
- |
|
| Benefits paid |
|
(11.5 |
) |
|
(16.8 |
) |
|
(7.5 |
) |
|
(4.9 |
) |
| Net transfer in (out) |
|
- |
|
|
- |
|
|
- |
|
|
(.9 |
) |
| Foreign currency impact |
|
- |
|
|
- |
|
|
(5.6 |
) |
|
7.7 |
|
| Fair value of plan assets at |
|
|
|
|
|
|
|
|
|
|
|
|
| end of year |
$ |
273.4 |
|
$ |
237.7 |
|
$ |
101.2 |
|
$ |
90.9 |
|
| Funded status |
$ |
(104.7 |
) |
$ |
(111.9 |
) |
$ |
(59.9 |
) |
$ |
(50.9 |
) |
| Unrecognized net actuarial loss |
|
132.6 |
|
|
139.6 |
|
|
59.9 |
|
|
50.7 |
|
| Unrecognized prior service cost |
|
.4 |
|
|
.4 |
|
|
.7 |
|
|
.4 |
|
| Unrecognized transition liability |
|
- |
|
|
- |
|
|
- |
|
|
(.1 |
) |
| Employer contributions |
|
- |
|
|
- |
|
|
.8 |
|
|
1.0 |
|
| Net amount recognized |
$ |
28.3 |
|
$ |
28.1 |
|
$ |
1.5 |
|
$ |
1.1 |
|
Included in the United States in the preceding table is a benefit obligation of $39.1 million and $36.0 million for 2005 and 2004, respectively, related to an unfunded pension plan. The accrued liability related to this plan was $35.2 million and $31.7 million as of November 30,2005 and 2004, respectively. The assets related to this plan are held in a Rabbi Trust and accordingly have not been included in the preceding table. These assets were $24.6 million and $19.0 million as of November 30, 2005 and 2004, respectively.
Amounts recognized in the consolidated balance sheet consist of the following:
| |
United States
|
International
|
| (millions) |
2005
|
|
2004
|
|
2005
|
|
2004
|
|
| Prepaid pension cost |
|
- |
|
|
- |
|
$ |
1.7 |
|
$ |
1.3 |
|
| Accrued pension liability |
$ |
(50.5 |
) |
$ |
(61.3 |
) |
|
(44.6 |
) |
|
(34.3 |
) |
| Intangible assets |
|
.4 |
|
|
.4 |
|
|
.6 |
|
|
.3 |
|
| Deferred income taxes |
|
29.0 |
|
|
33.5 |
|
|
13.3 |
|
|
10.2 |
|
| Accumulated other |
|
|
|
|
|
|
|
|
|
|
|
|
| comprehensive income |
|
49.4 |
|
|
55.5 |
|
|
30.5 |
|
|
23.6 |
|
| Net amount recognized |
$ |
28.3 |
|
$ |
28.1 |
|
$ |
1.5 |
|
$ |
1.1 |
|
The accumulated benefit obligation is the present value of pension benefits (whether vested or unvested) attributed to employee service rendered before the measurement date and based on employee service and compensation prior to that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation levels. The accumulated benefit obligation for the U.S. pension plans was $323.9 million and $299.1 million as of September 30, 2005 and 2004, respectively. The accumulated benefit obligation for the international pension plans was $146.3 million and $124.9 million as of November 30, 2005 and 2004, respectively.
Our actual and target weighted-average asset allocations of U.S. pension plan assets as of September 30, 2005 and 2004, by asset category, were as follows:
| |
September 30, |
|
| Asset Category |
2005 |
|
2004 |
|
Target |
|
| Equity securities |
|
69.0 |
% |
|
68.0 |
% |
|
70.0 |
% |
| Debt securities |
|
29.1 |
% |
|
30.3 |
% |
|
30.0 |
% |
| Other |
|
1.9 |
% |
|
1.7 |
% |
|
- |
|
| Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
The average actual and target asset allocations of the international pension plans' assets as of November 30, 2005 and 2004, by asset category, were as follows:
| |
November 30, |
| Asset Category |
2005 |
|
2004 |
|
Target |
|
| Equity securities |
|
66.0 |
% |
|
64.7 |
% |
|
65.0 |
% |
| Debt securities |
|
32.0 |
% |
|
32.5 |
% |
|
35.0 |
% |
| Real estate |
|
- |
|
|
.2% |
|
|
- |
|
| Other |
|
2.0 |
% |
|
2.6 |
% |
|
- |
|
| Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
