Harris Teeter 2012 Annual Report Download - page 48

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Common Collective Trust Funds – These investments are public investment vehicles valued using the Net Asset Value
(“NAV”) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund,
minus its liabilities, and then divided by the number of shares outstanding. The investment is classified within Level 2 of the
valuation hierarchy because the NAV’s unit price is quoted on a private market that is not active; however, the unit price is based
on underlying investments which are traded on an active market.
Bonds, U.S. Government Securities, Other Fixed Income Securities and Equities – These investments are valued at the
closing price reported on the active market on which the individual securities are traded.
Asset-Backed Securities – Prices are based on a compilation of primarily observable market information or a broker quote
in a non-active market.
Hedge Funds – These investments are in a private investment fund that uses proprietary trading methods to seek returns.
It is valued using the NAV provided by the manager of the fund. The investment is classified within Level 2 of the valuation
hierarchy because the NAV’s unit price is quoted on a private market that is not active.
Mutual Funds – These investments are public investment vehicles valued using the NAV provided by the administrator
of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided
by the number of shares outstanding. The NAV is a quoted price in an active market.
Group Annuity Contract – Fair value is calculated by discounting the related cash flow based on current yields of similar
instruments with comparable durations considering the credit-worthiness of the issues.
Assets in the directed trusts by investment classification as of the fiscal year end were as follows:
Asset Class 2012 2011
Fixed income 66.3% 49.5%
Domestic equities 15.3 22.7
International equities 8.8 9.5
Alternative Investments – Real Estate 2.3 2.6
Alternative Investments – Hedge Funds 5.4 13.5
Guaranteed investment contracts 0.8 0.8
Cash equivalents 1.1 1.4
100% 100%
Investments in the pension trust are overseen by the Retirement Plan Committee which is made up of officers of the
Company and directors. The Company has developed an Investment Policy Statement based on the need to satisfy the long-term
liabilities of the Pension Plan. The Company seeks to maximize return with reasonable and prudent levels of risk. Risk
management is accomplished through diversification across asset classes, multiple investment manager portfolios and both
general and portfolio-specific investment guidelines. The general asset guidelines by segment are as follows:
Asset Class Minimum Exposure Target Maximum Exposure
Investment grade fixed income and cash equivalents 30.0% 50.0% 100.0%
Domestic equities: 0.0 19.0 40.0
Large cap core 0.0 9.0 20.0
Small cap value 0.0 5.0 10.0
Small cap growth 0.0 5.0 10.0
International equities: 0.0 13.0 20.0
International value 0.0 4.5 7.0
International growth 0.0 4.5 7.0
Emerging markets 0.0 4.0 6.0
Alternative Investments: 0.0 18.0 30.0
Real Estate 0.0 6.0 10.0
Hedge Funds 0.0 12.0 20.0
HARRIS TEETER SUPERMARKETS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
44