Employee Benefits

Cooper's Retirement Income Plan

Cooper's Retirement Income Plan (Plan), a defined benefit plan, covers substantially all full-time United States employees. Cooper's contributions are designed to fund normal cost on a current basis and to fund the estimated prior service cost of benefit improvements. The unit credit actuarial cost method is used to determine the annual cost. Cooper pays the entire cost of the Plan and funds such costs as they accrue. Virtually all of the assets of the Plan are comprised of equities and participation in equity and fixed income funds.

The following table sets forth the Plan's benefit obligations and fair value of the Plan assets at October 31, 2013, and the funded status of the Plan and net periodic pension costs for each of the years in the three-year period ended October 31, 2013.

Retirement Income Plan



Years Ended October 31, (In thousands)	2013			2012			2011
Change in benefit obligation
Benefit obligation, beginning of year	$	88,607		$	64,989		$	54,751
Service cost	7,383			4,937			4,749
Interest cost	3,287			3,053			2,973
Benefits paid	(3,508		)	(1,308		)	(1,440		)
Actuarial (gain)/loss	(11,609		)	16,936			3,956
Benefit obligation, end of year	$	84,160		$	88,607		$	64,989
Change in plan assets
Fair value of plan assets, beginning of year	$	47,427		$	39,098		$	33,444
Actual return on plan assets	9,083			4,411			1,474
Employer contributions	6,234			5,226			5,620
Benefits paid	(3,508		)	(1,308		)	(1,440		)
Fair value of plan assets, end of year	$	59,236		$	47,427		$	39,098
Funded status at end of year	$	(24,924	)	$	(41,180	)	$	(25,891	)



Years Ended October 31, (In thousands)	2013			2012			2011
Amounts recognized in the statement of financial position consist of:
Noncurrent asset	$	—		$	—		$	—
Current liability	—			—			—
Noncurrent liabilities	(24,924		)	(41,180		)	(25,891		)
Net amount recognized at year end	$	(24,924	)	$	(41,180	)	$	(25,891	)



Years Ended October 31, (In thousands)	2013		2012		2011
Amounts recognized in accumulated other comprehensive income consist of:
Net transition obligation	$	—	$	—	$	20
Prior service cost	28		53		77
Net loss	16,012		34,957		20,134
Accumulated other comprehensive income	$	16,040	$	35,010	$	20,231



Years Ended October 31, (In thousands)	2013		2012		2011
Information for pension plans with accumulated benefit obligations in excess of plan assets
Projected benefit obligation	$	84,160	$	88,607	$	64,989
Accumulated benefit obligation	$	73,641	$	77,596	$	57,388
Fair value of plan assets	$	59,236	$	47,427	$	39,098



Years Ended October 31, (In thousands)	2013			2012			2011
Reconciliation of prepaid (accrued) pension cost
Accrued pension cost at prior fiscal year end	$	(6,170	)	$	(5,660	)	$	(5,706	)
Net periodic benefit cost	8,947			5,736			5,574
Contributions made during the year	6,234			5,226			5,620
Accrued pension cost at fiscal year end	$	(8,883	)	$	(6,170	)	$	(5,660	)



Years Ended October 31, (In thousands)	2013			2012			2011
Components of net periodic benefit cost and other amounts recognized in other comprehensive income
Net periodic benefit cost:
Service cost	$	7,383		$	4,937		$	4,748
Interest cost	3,287			3,053			2,973
Expected return on plan assets	(3,933		)	(3,424		)	(2,944		)
Amortization of transitional (asset) or obligation	—			20			21
Amortization of prior service cost	24			24			24
Recognized actuarial loss	2,186			1,126			752
Net periodic pension cost	$	8,947		$	5,736		$	5,574



Years Ended October 31, (In thousands)	2013			2012			2011
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net transition obligation	$	—		$	—		$	—
Prior service cost	—			—			—
Net (gain) loss	(16,760		)	15,950			5,426
Amortizations of net transition obligation	—			(21		)	(21		)
Amortizations of prior service cost	(24		)	(24		)	(24		)
Amortizations of net gain	(2,186		)	(1,126		)	(752		)
Total recognized in other comprehensive income	$	(18,970	)	$	14,779		$	4,629
Total recognized in net periodic benefit cost and other comprehensive income	$	(10,023	)	$	20,515		$	10,203

The estimated net loss, net transition obligation and prior service cost for the plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $618,000, $0 and $24,208, respectively.



Years Ended October 31,	2013		2012		2011
Weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligation at year end:
Discount rate for determining net periodic pension cost	3.75	%	4.75	%	5.50	%
Discount rate for determining benefit obligations at year end	4.75	%	3.75	%	4.75	%
Rate of compensation increase for determining expense	4.00	%	4.00	%	4.00	%
Rate of compensation increase for determining benefit obligations at year end	4.00	%	4.00	%	4.00	%
Expected rate of return on plan assets for determining net periodic pension cost	8.00	%	8.50	%	8.50	%
Expected rate of return on plan assets at year end	8.00	%	8.00	%	8.50	%
Measurement date for determining assets and benefit obligations at year end	10/31/2013		10/31/2012		10/31/2011

The discount rate enables us to state expected future cash flows at a present value on the measurement date. The discount rate used for the plan is based primarily on the yields of a universe of high quality corporate bonds or the spot rate of high quality AA-rated corporate bonds, with durations corresponding to the expected durations of the benefit obligations. A change in the discount rate will cause the present value of benefit obligations to change in the opposite direction. If a discount rate of 3.75%, which is similar to prior fiscal year, had been used, the projected benefit obligation would have been $99.9 million, and the accumulated benefit obligation would have been $86.4 million.

The expected rate of return on plan assets was determined based on a review of historical returns, both for this plan and for medium- to large-sized defined benefit pension funds with similar asset allocations. This review generated separate expected returns for each asset class listed below. These expected future returns were then blended based on this Plan's target asset allocation.

Plan Assets

Weighted-average asset allocations at year end, by asset category are as follows:



Years Ended October 31,	2013		2012		2011
Asset category
Cash and cash equivalents	5.3	%	3.0	%	2.1	%
Corporate common stock	14.6	%	16.5	%	19.0	%
Equity mutual funds	47.5	%	43.2	%	41.1	%
Real estate funds	3.8	%	5.2	%	5.6	%
Bond mutual funds	28.8	%	32.1	%	32.2	%
Total	100.0	%	100.0	%	100.0	%

The Plan invests in a diversified portfolio of assets intended to minimize risk of poor returns while maximizing expected portfolio returns. To achieve the long-term rate of return, plan assets will be invested in a mixture of instruments, including but not limited to, corporate common stock (may include the Company's stock), investment grade bond funds, cash, balanced funds, real estate funds, small or large cap equity funds and international equity funds. The allocation of assets will be determined by the investment manager, and will typically include 50% to 80% equities with the remainder invested in fixed income and cash. Presently, this diversified portfolio is expected to return roughly 8.0% in the long run. Effective November 1, 2012, the expected rate of return on assets was reduced from 8.5% to 8.0%.

Fair Value Measurement of Plan Assets



(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset category
Cash and cash equivalents	$	3,112	$	3,112	$	—	$	—
Corporate common stock	8,670		8,670		—		—
Equity mutual funds	28,163		28,163		—		—
Real estate funds	2,267		2,267		—		—
Bond mutual funds	17,024		17,024		—		—
Total	$	59,236	$	59,236	$	—	$	—

The Plan has an established process for determining the fair value of plan assets. Fair value is based upon quoted market prices, as Level 1 inputs, where available. For our investments in equity and bond mutual funds, and real estate funds, fair value is based on observable, Level 1 inputs, as price quotes are available and the fair values of these funds were not impacted by liquidity restrictions or the fund status. Level 2 assets are those where price quotes are not readily available and the fair value would be determined based on other observable inputs. Level 3 assets are those where price quotes are not readily available and the fair value would be determined based on unobservable inputs.

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Cash Flows

Contributions

The Company contributions to the pension plan were $6.2 million, $5.2 million and $5.6 million for fiscal 2013, 2012 and 2011, respectively. The Company closely monitors the funded status of the Plan with respect to legislative and accounting rules. The Company is expected to make contributions of about $8.8 million during fiscal 2014.

Estimated Future Benefit Payments



Years (In thousands)
2014	$	2,019
2015	$	2,349
2016	$	2,748
2017	$	3,142
2018	$	3,491
2019 - 2023	$	24,587

Cooper's 401(k) Savings Plan

Cooper's 401(k) savings plan provides for the deferral of compensation as described in the Internal Revenue Code and is available to substantially all United States employees. Employees who participate in the 401(k) plan may elect to have up to 75% of their pre-tax salary or wages deferred and contributed to the trust established under the plan. Cooper's contributions on account of participating employees, net of forfeiture credits, were $3.4 million, $2.9 million and $2.4 million for the years ended October 31, 2013, 2012 and 2011, respectively.

International Pension Plans

For our employees outside the United States, we also participate in country-specific defined contribution plans and government-sponsored retirement plans. The defined contribution plans are administered by third-party trustees and we are not directly responsible for providing benefits to participants of government-sponsored plans. The Company’s contributions to such plans are not significant individually or in the aggregate.