INTL FCStone 2013 Annual Report Download - page 118

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INTLFCSTONEINC.Form10K 97
PART II
ITEM 8Financial Statements and Supplementary Data
e components of net periodic pension cost recognized in the consolidated income statements for the years ended September 30,
2013, 2012 and 2011 were as follows:
(in millions)
Year Ended September 30,
2013 2012 2011
Interest cost $ 1.5 $ 1.8 $ 1.9
Less expected return on assets (1.8) (1.7) (1.7)
Net amortization and deferral 0.8 0.4 —
Net periodic pension cost $ 0.5 $ 0.5 $ 0.2
Other changes in plan assets and benet obligations recognized in other comprehensive income for the years ended September 30,
2013 and 2012 were as follows:
(in millions)
Year Ended September 30,
2013 2012
Net (gain) loss $ (4.6) $ 2.9
Amortization of loss (0.8) (0.4)
Total recognized in other comprehensive income 5.4 2.5
Total recognized in net periodic benet cost and other comprehensive income $ (4.9) $ 3.0
Plan Assets
e following table sets forth the actual asset allocation as of September 30, 2013 and 2012, and the target asset allocation for the
Company’s plan assets:
September 30, 2013 September 30, 2012 Target Asset Allocation
Equity securities 68% 66% 70%
Debt securities 32% 34% 30%
TOTAL 100% 100%
e long-term goal for equity exposure and for xed income
exposure is presented above. e exact allocation at any point in
time is at the discretion of the investment manager, but should
recognize the need to satisfy both the volatility and the rate of
return objectives for equity exposure and satisfy the objective of
preserving capital for the xed income exposure.
e investment philosophy of the Company’s pension plans
reect that over the long-term, the risk of owning equities has
been and should continue to be rewarded with a greater return
than that available from xed income investments. e primary
objective is for the plan to achieve a rate of return sucient to
fully fund the pension obligation without assuming undue risk.
Investments in the Company’s pension plans include debt and
equity securities. e fair value of plan assets is based upon the
fair value of the underlying investments, which include cash
equivalents, common stock, U.S. government securities and federal
agency obligations, municipal and corporate bonds, and equity
funds. Cash equivalents consist of short-term money market
funds that are stated at cost, which approximates fair value.
e shares of common stock, U.S. government securities and
federal agency obligations, municipal and corporate bonds are
stated at estimated fair value based upon quoted market prices,
if available, or dealer quotes. e equity funds are investment
vehicles valued using the net asset value (“NAV”) provided by the
administrator of the fund. e NAV is based on the underlying
assets owned by the fund, minus its liabilities, and then divided
by the number of shares outstanding.
e methods described above may produce a fair value calculation
that may not be indicative of net realizable value or reective
of future fair values. Furthermore, while the Company believes
the valuation methods are appropriate and consistent with
other market participants, the use of dierent methodologies
or assumptions to determine the fair value of certain nancial
instruments could result in a dierent fair value measurement
at the reporting date.
Equity securities did not include any INTL FCStone Inc. common
stock as of September 30, 2013 and 2012, respectively.