Pension and Other Postretirement Benefit Plans

12 Months Ended

Apr. 27, 2011

Pension and Other Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefit Plans

11.   Pension and Other Postretirement Benefit Plans

Pension Plans:

The Company maintains retirement plans for the majority of its employees. Current defined benefit plans are provided primarily for domestic union and foreign employees. Defined contribution plans are provided for the majority of its domestic non-union hourly and salaried employees as well as certain employees in foreign locations.

Other Postretirement Benefit Plans:

The Company and certain of its subsidiaries provide health care and life insurance benefits for retired employees and their eligible dependents. Certain of the Company’s U.S. and Canadian employees may become eligible for such benefits. The Company currently does not fund these benefit arrangements until claims occur and may modify plan provisions or terminate plans at its discretion.

Measurement Date:

The Company uses the last day of its fiscal year as the measurement date for all of its defined benefit plans and other postretirement benefit plans.

Obligations and Funded Status:

The following table sets forth the changes in benefit obligation, plan assets and funded status of the Company’s principal defined benefit plans and other postretirement benefit plans at April 27, 2011 and April 28, 2010.

	Pension Benefits						Other Retiree Benefits
	2011			2010			2011			2010
	(Dollars in thousands)
Change in Benefit Obligation:
Benefit obligation at the beginning of the year	$	2,585,984		$	2,230,102		$	235,297		$	234,175
Service cost		32,329			30,486			6,311			5,999
Interest cost		142,133			149,640			12,712			15,093
Participants’ contributions		2,444			2,674			822			905
Amendments		377			5,807			(3,710	)		(21,115	)
Actuarial (gain)/loss		(8,457	)		238,168			(3,786	)		9,672
Divestitures		—			(413	)		—			—
Settlement		(3,275	)		(4,663	)		—			—
Curtailment		—			(3,959	)		—			—
Benefits paid		(159,307	)		(156,807	)		(16,986	)		(18,395	)
Exchange/other		173,088			94,949			3,770			8,963
Benefit obligation at the end of the year	$	2,765,316		$	2,585,984		$	234,430		$	235,297
Change in Plan Assets:
Fair value of plan assets at the beginning of the year	$	2,869,971		$	1,874,702		$	—		$	—
Actual return on plan assets		318,494			561,997			—			—
Divestitures		—			(413	)		—			—
Settlement		(3,275	)		(4,663	)		—			—
Employer contribution		22,411			539,939			16,164			17,490
Participants’ contributions		2,444			2,674			822			905
Benefits paid		(159,307	)		(156,807	)		(16,986	)		(18,395	)
Exchange		211,143			52,542			—			—
Fair value of plan assets at the end of the year		3,261,881			2,869,971			—			—
Funded status	$	496,565		$	283,987		$	(234,430	)	$	(235,297	)

Amounts recognized in the consolidated balance sheets consist of the following:

	Pension Benefits						Other Retiree Benefits
	2011			2010			2011			2010
	(Dollars in thousands)
Other non-current assets	$	644,598		$	424,554		$	—		$	—
Other accrued liabilities		(31,589	)		(12,842	)		(18,259	)		(18,874	)
Other non-current liabilities		(116,444	)		(127,725	)		(216,171	)		(216,423	)
Net amount recognized	$	496,565		$	283,987		$	(234,430	)	$	(235,297	)

Certain of the Company’s pension plans have projected benefit obligations in excess of the fair value of plan assets. For these plans, the projected benefit obligations and the fair value of plan assets at April 27, 2011 were $175.0 million and $27.0 million, respectively. For pension plans having projected benefit obligations in excess of the fair value of plan assets at April 28, 2010, the projected benefit obligations and the fair value of plan assets were $160.9 million and $20.3 million, respectively.

The accumulated benefit obligation for all defined benefit pension plans was $2,602.0 million at April 27, 2011 and $2,414.3 million at April 28, 2010.

Certain of the Company’s pension plans have accumulated benefit obligations in excess of the fair value of plan assets. For these plans, the accumulated benefit obligations, projected benefit obligations and the fair value of plan assets at April 27, 2011 were $154.3 million, $175.0 million and $27.0 million, respectively. For pension plans having accumulated benefit obligations in excess of the fair value of plan assets at April 28, 2010, the accumulated benefit obligations, projected benefit obligations and the fair value of plan assets were $137.0 million, $160.9 million and $20.3 million, respectively.

Components of Net Periodic Benefit Cost and Defined Contribution Plan Expense:

Total pension cost of the Company’s principal pension plans and postretirement plans consisted of the following:

	Pension Benefits									Other Retiree Benefits
	2011			2010			2009			2011			2010			2009
	(Dollars in thousands)
Components of defined benefit net periodic benefit cost:
Service cost	$	32,329		$	30,486		$	33,321		$	6,311		$	5,999		$	6,501
Interest cost		142,133			149,640			143,601			12,712			15,093			15,357
Expected return on assets		(229,258	)		(211,408	)		(207,774	)		—			—			—
Amortization of:
Prior service cost/(credit)		2,455			2,173			3,182			(5,155	)		(3,796	)		(3,812	)
Net actuarial loss		77,687			53,882			33,206			1,604			540			3,681
Loss due to curtailment, settlement and special termination benefits		2,039			612			635			—			—			—
Net periodic benefit cost		27,385			25,385			6,171			15,472			17,836			21,727
Defined contribution plans		49,089			47,356			36,404			—			—			—
Total cost		76,474			72,741			42,575			15,472			17,836			21,727
Less periodic benefit cost associated with discontinued operations		—			618			1,376			—			—			—
Periodic benefit cost associated with continuing operations	$	76,474		$	72,123		$	41,199		$	15,472		$	17,836		$	21,727

Accumulated Other Comprehensive Income:

Amounts recognized in accumulated other comprehensive loss, before tax, consist of the following:

	Pension Benefits				Other Retiree Benefits
	2011		2010		2011			2010
	(Dollars in thousands)
Net actuarial loss	$	909,796	$	1,085,471	$	11,816		$	17,206
Prior service cost/(credit)		28,649		30,683		(20,335	)		(21,780	)
Net amount recognized	$	938,445	$	1,116,154	$	(8,519	)	$	(4,574	)

The change in other comprehensive loss related to pension benefit gains arising during the period was $95.5 million and $106.6 million at April 27, 2011 and April 28, 2010, respectively. The change in other comprehensive loss related to the reclassification of pension benefit losses to net income was $82.2 million and $60.6 million at April 27, 2011 and April 28, 2010, respectively.

The change in other comprehensive loss related to postretirement benefit gains arising during the period is $7.5 million and $11.4 million at April 27, 2011 and at April 28, 2010, respectively. The change in other comprehensive loss related to the reclassification of postretirement benefit gains to net income is $3.6 million and $3.2 million at April 27, 2011 and at April 28, 2010, respectively.

Amounts in accumulated other comprehensive loss (income) expected to be recognized as components of net periodic benefit costs/(credits) in the following fiscal year are as follows:

	Pension Benefits				Other Retiree Benefits
	2011		2010		2011			2010
	(Dollars in thousands)
Net actuarial loss	$	85,932	$	76,963	$	1,095		$	1,604
Prior service cost/(credit)		2,020		2,373		(6,116	)		(5,155	)
Net amount recognized	$	87,952	$	79,336	$	(5,021	)	$	(3,551	)

Assumptions:

The weighted-average rates used for the fiscal years ended April 27, 2011 and April 28, 2010 in determining the projected benefit obligations for defined benefit pension plans and the accumulated postretirement benefit obligation for other postretirement plans were as follows:

	Pension Benefits						Other Retiree Benefits
	2011			2010			2011			2010
Discount rate		5.5	%		5.6	%		5.0	%		5.5	%
Compensation increase rate		3.8	%		4.0	%		—			—

The weighted-average rates used for the fiscal years ended April 27, 2011, April 28, 2010 and April 29, 2009 in determining the defined benefit plans’ net pension costs and net postretirement benefit costs were as follows:

	Pension Benefits									Other Retiree Benefits
	2011			2010			2009			2011			2010			2009
Expected rate of return		8.2	%		8.1	%		8.2	%		—			—			—
Discount rate		5.6	%		6.5	%		6.1	%		5.5	%		6.4	%		5.9	%
Compensation increase rate		4.0	%		4.3	%		4.5	%		—			—			—

The Company’s expected rate of return is determined based on a methodology that considers investment real returns for certain asset classes over historic periods of various durations, in conjunction with the long-term outlook for inflation (i.e. “building block” approach). This methodology is applied to the actual asset allocation, which is in line with the investment policy guidelines for each plan. The Company also considers long-term rates of return for each asset class based on projections from consultants and investment advisors regarding the expectations of future investment performance of capital markets.

The weighted-average assumed annual composite rate of increase in the per capita cost of company-provided health care benefits begins at 7.4% for 2012, gradually decreases to 4.8% by 2018 and remains at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for postretirement medical benefits. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
	(Dollars in thousands)
Effect on total service and interest cost components	$	1,632	$	1,472
Effect on postretirement benefit obligations	$	15,831	$	14,417

Pension Plan Assets:

The underlying basis of the investment strategy of the Company’s defined benefit plans is to ensure that pension funds are available to meet the plans’ benefit obligations when they are due. The Company’s investment objectives include: investing plan assets in a high-quality, diversified manner in order to maintain the security of the funds; achieving an optimal return on plan assets within specified risk tolerances; and investing according to local regulations and requirements specific to each country in which a defined benefit plan operates. The investment strategy expects equity investments to yield a higher return over the long term than fixed income securities, while fixed income securities are expected to provide certain matching characteristics to the plans’ benefit payment cash flow requirements. Company common stock held as part of the equity securities amounted to less than one percent of plan assets at April 27, 2011 and April 28, 2010. The Company’s investment policy specifies the type of investment vehicles appropriate for the Plan, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance. It also provides guidelines enabling Plan fiduciaries to fulfill their responsibilities.

The Company’s defined benefit pension plans’ weighted average asset allocation at April 27, 2011 and April 28, 2010 and weighted average target allocation were as follows:

							Target
	Plan Assets at						Allocation at
Asset Category	2011			2010			2011			2010
Equity securities		62	%		58	%		58	%		63	%
Debt securities		32	%		29	%		32	%		35	%
Real estate		3	%		1	%		9	%		1	%
Other(1)		3	%		12	%		1	%		1	%
		100	%		100	%		100	%		100	%

(1) Plan assets at April 28, 2010 in the Other asset category include 11% of cash which reflects significant cash contributions to the pension plans prior to the end of fiscal year 2010.

In Fiscal 2010, the Company adopted a new accounting standard requiring additional disclosures for Plan assets of defined benefit pension and other post-retirement plans. As required by the standard, the Company categorized Plan assets within a three level fair value hierarchy. The following section describes the valuation methodologies used to measure the fair value of pension plan assets, including an indication of the level in the fair value hierarchy in which each type of asset is generally classified.

Equity Securities.  These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1.

Equity Securities (mutual and pooled funds).  Mutual funds are valued at the net asset value of shares held by the Plan at year end. As such, these mutual fund investments are classified as Level 1. Pooled funds are similar in nature to retail mutual funds, but are more efficient for institutional investors than retail mutual funds. As pooled funds are only accessible by institutional investors, the net asset value is not readily observable by non-institutional investors; therefore, pooled funds are classified as Level 2.

Fixed Income Securities.  These securities consist of publicly traded U.S. and non-U.S. fixed interest obligations (principally corporate bonds and debentures). Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. As such, a portion of these securities are included in Levels 1, 2 and 3.

Other Investments.  Primarily consist of real estate, private equity holdings and interest rate swaps. Direct investments of real estate and private equity are valued by investment managers based on the most recent financial information available, which typically represents significant observable data. As such, these investments are generally classified as Level 3. The fair value of interest rate swaps is determined through use of observable market swap rates and are classified as Level 2.

Cash and Cash Equivalents.  This consists of direct cash holdings and institutional short-term investment vehicles. Direct cash holdings are valued based on cost, which approximates fair value and are classified as Level 1. Institutional short-term investment vehicles are valued daily and are classified as Level 2.

	April 27, 2011
Asset Category	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Equity Securities	$	863,404	$	—	$	—	$	863,404
Equity Securities (mutual and pooled funds)		157,296		1,005,678		—		1,162,974
Fixed Income Securities		53,381		966,157		9,649		1,029,187
Other Investments		—		—		131,095		131,095
Cash and Cash Equivalents		16,270		58,951		—		75,221
Total	$	1,090,351	$	2,030,786	$	140,744	$	3,261,881

	April 28, 2010
Asset Category	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Equity Securities	$	894,684	$	—	$	—	$	894,684
Equity Securities (mutual and pooled funds)		122,753		641,727		—		764,480
Fixed Income Securities		49,951		785,924		8,646		844,521
Other Investments		—		7,491		35,569		43,060
Cash and Cash Equivalents		14,260		308,966		—		323,226
Total	$	1,081,648	$	1,744,108	$	44,215	$	2,869,971

Level 3 Gains and Losses:

Changes in the fair value of the Plan’s Level 3 assets are summarized as follows:

													Fair
	Fair Value												Value
	April 28,							Realized		Unrealized			April 27,
	2010		Acquisitions		Dispositions			Gain/(Loss)		Gain/(Loss)			2011
	(Dollars in thousands)
Fixed Income Securities	$	8,646	$	—	$	—		$	—	$	1,003		$	9,649
Other Investments		35,569		95,518		(619	)		2,727		(2,100	)		131,095
Total	$	44,215	$	95,518	$	(619	)	$	2,727	$	(1,097	)	$	140,744

														Fair
	Fair Value													Value
	April 29,							Realized			Unrealized			April 28,
	2009		Acquisitions		Dispositions			Gain/(Loss)			Gain/(Loss)			2010
	(Dollars in thousands)
Fixed Income Securities	$	8,873	$	—	$	(1,500	)	$	246		$	1,027		$	8,646
Other Investments		38,306		3,362		(2,658	)		(2,627	)		(814	)		35,569
Total	$	47,179	$	3,362	$	(4,158	)	$	(2,381	)	$	213		$	44,215

Cash Flows:

The Company contributed $22.4 million to the defined benefit plans in Fiscal 2011, none of which was discretionary. The Company funds its U.S. defined benefit plans in accordance with IRS regulations, while foreign defined benefit plans are funded in accordance with local laws and regulations in each respective country. Discretionary contributions to the pension funds may also be made by the Company from time to time. Defined benefit plan contributions for the next fiscal year are expected to be less than $40 million; however, actual contributions may be affected by pension asset and liability valuation changes during the year.

The Company paid $16.2 million for benefits in the postretirement medical plans in Fiscal 2011. The Company makes payments on claims as they occur during the fiscal year. Payments for the next fiscal year are expected to be approximately $18 million. The medical subsidy received in Fiscal 2011 was $1.4 million. Estimated future medical subsidy receipts are approximately $0.3 million for 2012, $0.3 million for 2013, $0.4 million annually from 2014 through 2016 and $2.5 million for the period from 2017 through 2021. The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, and on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (HCERA) was signed into law, which amends certain aspects of the PPACA. Among other things, the PPACA reduces the tax benefits available to an employer that receives the Medicare Part D subsidy. As a result of the PPACA, the Company was required to recognize in Fiscal 2010 tax expense of $3.9 million (approximately $0.01 per share) related to the reduced deductibility in future periods of the postretirement prescription drug coverage. The PPACA and HCERA (collectively referred to as the Act) will have both immediate and long-term ramifications for many employers that provide retiree health benefits.

Benefit payments expected in future years are as follows:

			Other
	Pension		Retiree
	Benefits		Benefits
	(Dollars in thousands)
2012	$	201,912	$	18,259
2013	$	189,005	$	18,679
2014	$	192,729	$	19,237
2015	$	188,400	$	19,599
2016	$	192,655	$	20,115
Years 2017-2021	$	1,008,931	$	103,641