XML 87 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
Employee Benefit Plans
 12 Months Ended
Nov. 24, 2013
Compensation and Retirement Disclosure [Abstract]  
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
Pension plans.  The Company has several non-contributory defined benefit retirement plans covering eligible employees. Plan assets are invested in a diversified portfolio of securities including stocks, bonds, real estate investment funds, cash equivalents, and alternative investments. Benefits payable under the plans are based on years of service, final average compensation, or both. The Company retains the right to amend, curtail or discontinue any aspect of the plans, subject to local regulations.
Postretirement plans.  The Company maintains plans that provide postretirement benefits to eligible employees, principally health care, to substantially all U.S. retirees and their qualified dependents. These plans were established with the intention that they would continue indefinitely. However, the Company retains the right to amend, curtail or discontinue any aspect of the plans at any time. The plans are contributory and contain certain cost-sharing features, such as deductibles and coinsurance. The Company's policy is to fund postretirement benefits as claims and premiums are paid.
The following tables summarize activity of the Company's defined benefit pension plans and postretirement benefit plans:
 
Pension Benefits
 
Postretirement Benefits
 
2013
 
2012
 
2013
 
2012
 
(Dollars in thousands)
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
1,388,650

 
$
1,203,677

 
$
155,864

 
$
156,060

Service cost
8,707

 
8,952

 
376

 
397

Interest cost
51,984

 
57,635

 
4,957

 
6,634

Plan participants' contribution
771

 
884

 
5,242

 
5,531

Actuarial (gain) loss(1)
(114,441
)
 
184,183

 
(10,626
)
 
10,408

Net curtailment gain
(341
)
 
(2,379
)
 
—

 
—

Impact of foreign currency changes
1,219

 
1,103

 
—

 
—

Plan settlements
(7,909
)
 
(867
)
 
—

 
—

Special termination benefits
74

 
159

 
—

 
—

Net benefits paid(2)
(94,915
)
 
(64,697
)
 
(20,218
)
 
(23,166
)
Benefit obligation at end of year
$
1,233,799

 
$
1,388,650

 
$
135,595

 
$
155,864

 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
894,362

 
771,914

 
—

 
—

Actual return on plan assets(3)
75,683

 
125,430

 
—

 
—

Employer contribution
35,064

 
60,096

 
14,976

 
17,635

Plan participants' contributions
771

 
884

 
5,242

 
5,531

Plan settlements
(7,909
)
 
(867
)
 
—

 
—

Impact of foreign currency changes
(23
)
 
1,602

 
—

 
—

Benefits paid
(94,915
)
 
(64,697
)
 
(20,218
)
 
(23,166
)
Fair value of plan assets at end of year
903,033

 
894,362

 
—

 
—

Unfunded status at end of year
$
(330,766
)
 
$
(494,288
)
 
$
(135,595
)
 
$
(155,864
)
_____________
(1)
Actuarial gains in 2013 and losses in 2012 in the Company's pension benefit plans resulted from changes in discount rate assumptions, primarily for the Company's U.S. plans. Changes in financial markets during 2013 and 2012, including an increase and decrease, respectively, in corporate bond yield indices, resulted in a decrease and increase in benefit obligations, respectively.
(2)
The increase in pension benefits paid in 2013 was primarily due the voluntary cash out program offered to vested, terminated U.S. pension plan participants in the first half of 2013. Pension plan assets were utilized to settle pension obligations for deferred participants that elected to participate in the program.
(3)
The decrease in return on plan assets in 2013 was primarily due to the increase in interest rates which resulted in lower returns on fixed income securities.
Amounts recognized in the consolidated balance sheets as of November 24, 2013, and November 25, 2012, consist of the following:
 
Pension Benefits
 
Postretirement Benefits
 
2013
 
2012
 
2013
 
2012
 
(Dollars in thousands)
Prepaid benefit cost
$
1,331

 
$
—

 
$
—

 
$
—

Accrued benefit liability – current portion
(8,622
)
 
(8,217
)
 
(13,347
)
 
(14,906
)
Accrued benefit liability – long-term portion
(323,475
)
 
(486,071
)
 
(122,248
)
 
(140,958
)
 
$
(330,766
)
 
$
(494,288
)
 
$
(135,595
)
 
$
(155,864
)
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss:
 
 
 
 
 
 
 
Net actuarial loss
$
(343,148
)
 
$
(493,487
)
 
$
(34,248
)
 
$
(51,644
)
Net prior service benefit
666

 
708

 
—

 
493

 
$
(342,482
)
 
$
(492,779
)
 
$
(34,248
)
 
$
(51,151
)

The accumulated benefit obligation for all defined benefit plans was $1.2 billion and $1.4 billion at November 24, 2013, and November 25, 2012, respectively. Information for the Company's defined benefit plans with an accumulated or projected benefit obligation in excess of plan assets is as follows:
 
Pension Benefits
 
2013
 
2012
 
(Dollars in thousands)
Accumulated benefit obligations in excess of plan assets:
 
 
 
Aggregate accumulated benefit obligation
$
1,147,938

 
$
1,335,827

Aggregate fair value of plan assets
827,764

 
859,373

 
 
 
 
Projected benefit obligations in excess of plan assets:
 
 
 
Aggregate projected benefit obligation
$
1,195,923

 
$
1,388,650

Aggregate fair value of plan assets
863,826

 
894,362


The components of the Company's net periodic benefit cost (income) were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
 
(Dollars in thousands)
Net periodic benefit cost (income):
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
8,707

 
$
8,952

 
$
10,241

 
$
376

 
$
397

 
$
478

Interest cost
51,984

 
57,635

 
60,314

 
4,957

 
6,634

 
7,629

Expected return on plan assets
(56,183
)
 
(52,029
)
 
(52,959
)
 
—

 
—

 
—

Amortization of prior service (benefit) cost(1)
(80
)
 
(78
)
 
47

 
(488
)
 
(16,356
)
 
(28,945
)
Amortization of actuarial loss
16,311

 
12,612

 
14,908

 
6,765

 
5,157

 
5,025

Curtailment (gain) loss
(564
)
 
(2,391
)
 
129

 
—

 
—

 
—

Special termination benefit
98

 
159

 
120

 
—

 
—

 
—

Net settlement loss
517

 
383

 
714

 
—

 
—

 
—

Net periodic benefit cost (income)
20,790

 
25,243

 
33,514

 
11,610

 
(4,168
)
 
(15,813
)
Changes in accumulated other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Actuarial (gain) loss
(134,378
)
 
110,262

 
 
 
(10,626
)
 
10,408

 
 
Amortization of prior service benefit(1)
80

 
78

 
 
 
488

 
16,356

 
 
Amortization of actuarial loss
(16,311
)
 
(12,612
)
 
 
 
(6,765
)
 
(5,157
)
 
 
Curtailment gain
498

 
192

 
 
 
—

 
—

 
 
Net settlement loss
(178
)
 
(77
)
 
 
 
—

 
—

 
 
Total recognized in accumulated other comprehensive loss
(150,289
)
 
97,843

 
 
 
(16,903
)
 
21,607

 
 
Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss
$
(129,499
)
 
$
123,086

 
 
 
$
(5,293
)
 
$
17,439

 
 
_____________
(1)
Postretirement benefits amortization of prior service benefit recognized during each of years 2012 and 2011 relates primarily to the favorable impact of the February 2004 and August 2003 plan amendments, which concluded amortization in 2012.
The amounts that will be amortized from “Accumulated other comprehensive loss” into net periodic benefit cost in 2014 for the Company's defined benefit pension and postretirement benefit plans are expected to be $10.8 million and $4.0 million, respectively.
Assumptions used in accounting for the Company's benefit plans were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
 
 
Discount rate
3.8%
 
4.9%
 
3.3%
 
4.5%
Expected long-term rate of return on plan assets
6.4%
 
6.7%
 
 
 
 
Rate of compensation increase
3.5%
 
3.6%
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligations:
 
 
 
 
 
 
 
Discount rate
4.6%
 
3.8%
 
4.2%
 
3.3%
Rate of compensation increase
3.7%
 
3.5%
 
 
 
 
 
 
 
 
 
 
 
 
Assumed health care cost trend rates were as follows:
 
 
 
 
 
 
 
Health care trend rate assumed for next year
 
 
 
 
7.2%
 
7.4%
Rate trend to which the cost trend is assumed to decline
 
 
 
 
4.5%
 
4.5%
Year that rate reaches the ultimate trend rate
 
 
 
 
2028
 
2028

For the Company's U.S. benefit plans, the discount rate used to determine the present value of the future pension and postretirement plan obligations was based on a yield curve constructed from a portfolio of high quality corporate bonds with various maturities. Each year's expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate. The Company utilized a variety of country-specific third-party bond indices to determine the appropriate discount rates to use for the benefit plans of its foreign subsidiaries.
The Company bases the overall expected long-term rate of return on assets on anticipated long-term returns of individual asset classes and each pension plans' target asset allocation strategy based on current economic conditions.  For the U.S. pension plan, the expected long-term returns for each asset class are determined through a mean-variance model to estimate 20-year returns for the plan. 
Health care cost trend rate assumptions are a significant input in the calculation of the amounts reported for the Company's postretirement benefits plans. A one percentage-point change in assumed health care cost trend rates would have no significant effect on the total service and interest cost components or on the postretirement benefit obligation.
Consolidated pension plan assets relate primarily to the U.S. pension plan. The Company utilizes the services of independent third-party investment managers to oversee the management of U.S. pension plan assets.  The Company's investment strategy is to invest plan assets in a diversified portfolio of domestic and international equity securities, fixed income securities and real estate and other alternative investments with the objective of generating long-term growth in plan assets at a reasonable level of risk. Prohibited investments for the U.S. pension plan include certain privately placed or other non-marketable debt instruments, letter stock, commodities or commodity contracts and derivatives of mortgage-backed securities, such as interest-only, principal-only or inverse floaters. The current target allocation percentages for the Company's U.S. pension plan assets are 34-38% for equity securities, 54-58% for fixed income securities and 6-10% for other alternative investments, including real estate.
The fair value of the Company's pension plan assets by asset class are as follows:
 
Year Ended November 24, 2013
Asset Class
Total
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
(Dollars in thousands)
Cash and cash equivalents
$
1,132

 
$
1,132

 
$
—

 
$
—

Equity securities(1)
 
 
 
 
 
 
 
U.S. large cap
175,181

 
—

 
175,181

 
—

U.S. small cap
31,163

 
—

 
31,163

 
—

International
133,339

 
—

 
133,339

 
—

Fixed income securities(2)
490,701

 
—

 
490,701

 
—

Other alternative investments


 
 
 
 
 
 
Real estate(3)
55,082

 
—

 
55,082

 
—

Private equity(4)
3,041

 
—

 
—

 
3,041

Hedge fund(5)
7,090

 
—

 
7,090

 
—

Other(6)
6,304

 
—

 
6,304

 
—

Total investments at fair value
$
903,033

 
$
1,132

 
$
898,860

 
$
3,041

_____________
(1)
Primarily comprised of equity index funds that track various market indices.
(2)
Predominantly includes bond index funds that invest in long-term U.S. government and investment grade corporate bonds.
(3)
Primarily comprised of investments in U.S. Real Estate Investment Trusts.
(4)
Represents holdings in a diversified portfolio of private equity funds and direct investments in companies located primarily in North America. Fair values are determined by investment fund managers using primarily unobservable market data.
(5)
Primarily invested in a diversified portfolio of equities, bonds, alternatives and cash with a low tolerance for capital loss.
(6)
Primarily relates to accounts held and managed by a third-party insurance company for employee-participants in Belgium. Fair values are based on accumulated plan contributions plus a contractually-guaranteed return plus a share of any incremental investment fund profits.
The fair value of plan assets are composed of U.S. plan assets of $756.5 million and non-U.S. plan assets of $146.5 million. The fair values of the substantial majority of the equity, fixed income and real estate investments are based on the net asset value of comingled trust funds that passively track various market indices.
The Company's estimated future benefit payments to participants, which reflect expected future service, as appropriate are anticipated to be paid as follows:
 
Fiscal year
Pension Benefits
 
Postretirement Benefits
 
Total
 
 
 
(Dollars in thousands)
 
 
2014
$
62,050

 
$
15,998

 
$
78,048

 
 
2015
62,690

 
15,498

 
78,188

 
 
2016
62,839

 
14,917

 
77,756

 
 
2017
64,806

 
14,229

 
79,035

 
 
2018
66,155

 
13,604

 
79,759

 
 
2019-2023
361,014

 
61,270

 
422,284

 

At November 24, 2013, the Company's contributions to its pension plans in 2014 were estimated to be approximately $18.4 million.