Arrow Electronics 2010 Annual Report Download - page 83

ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
81
The fair values of the company’s pension plan assets at December 31, 2009, utilizing the fair value
hierarchy discussed in Note 7 are as follows:
Level 1 Level 2 Level 3 Total
Cash Equivalents:
Common collective trusts
$
-
$
879
$
-
$
879
Equities:
U.S. common stocks 25,063 - - 25,063
International mutual funds 11,281 - - 11,281
Index mutual funds 12,428 - - 12,428
Fixed Income:
Mutual funds 25,031 - - 25,031
Insurance contracts - 726 - 726
Total
$
73,803
$
1,605
$
-
$
75,408
The investment portfolio contains a diversified blend of common stocks, bonds, cash equivalents, and
other investments, which may reflect varying rates of return. The investments are further diversified within
each asset classification. The portfolio diversification provides protection against a single security or class
of securities having a disproportionate impact on aggregate performance. The long-term target allocations
for plan assets are 65% in equities and 35% in fixed income, although the actual plan asset allocations
may be within a range around these targets. The actual asset allocations are reviewed and rebalanced
on a periodic basis to maintain the target allocations.
Comprehensive Income items
In 2010, 2009, and 2008, actuarial (gains)/losses of $(368), $(1,038), and $14,045, respectively, were
recognized in comprehensive income (loss), net of related taxes, related to the company's defined benefit
plans. In 2010, 2009, and 2008, the following amounts were recognized as a reclassification adjustment
of comprehensive income (loss), net of related taxes, as a result of being recognized in net periodic
pension cost: transition obligation of $18, $251, and $299, respectively, prior service cost of $43, $186,
and $323, respectively, and an actuarial loss of $2,369, $2,019, and $939, respectively.
Included in accumulated other comprehensive loss at December 31, 2010 and 2009 are the following
amounts, net of related taxes, that have not yet been recognized in net periodic pension cost:
unrecognized transition obligation of $488 and $506, respectively, unrecognized prior service costs of $60
and $103, respectively, and unrecognized actuarial losses of $26,156 and $28,893, respectively.
The prior service cost and actuarial loss included in accumulated other comprehensive loss, net of related
taxes, which are expected to be recognized in net periodic pension cost for the year ended December 31,
2011 are $112 and $3,923, respectively.
Defined Contribution Plan
The company has a defined contribution plan for eligible employees, which qualifies under Section 401(k)
of the Internal Revenue Code. The company's contribution to the plan, which is based on a specified
percentage of employee contributions, amounted to $8,870, $7,821, and $9,420 in 2010, 2009, and 2008,
respectively. Certain international subsidiaries maintain separate defined contribution plans for their
employees and made contributions thereunder, which amounted to $17,734, $15,588, and $17,759 in
2010, 2009, and 2008, respectively.