INTL FCStone 2014 Annual Report Download - page 109

INTL FCSTONE INC.  Form 10K 93
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,
2014, 2013 and 2012 were as follows:
(in millions)
Year Ended September 30,
2014 2013 2012
Interest cost $ 1.7 $ 1.5 $ 1.8
Less expected return on assets (2.0) (1.8) (1.7)
Net amortization and deferral 0.2 0.8 0.4
Net periodic pension cost $ (0.1) $ 0.5 $ 0.5
Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended September 30,
2014 and 2013 were as follows:
(in millions)
Year Ended September 30,
2014 2013
Net (gain) loss $ 1.4 $ (4.6)
Amortization of loss (0.2) (0.8)
Total recognized in other comprehensive income 1.2 (5.4)
Total recognized in net periodic benefit cost and other comprehensive income $ 1.1 $ (4.9)
Plan Assets
e following table sets forth the actual asset allocation as of September 30, 2014 and 2013, and the target asset allocation for the
Company’s plan assets:
September 30, 2014 September 30, 2013 Target Asset Allocation
(1)
Equity securities 34% 68% 35%
Debt securities 66% 32% 65%
Total 100% 100%
(1) During January 2014, the Company changed its relative mix of investments held as a result of a change in the overall investment strategy.
e long-term goal for equity exposure and for fixed 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 fixed income exposure.
e investment philosophy of the Company’s pension plans
reflect 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 fixed income investments. e primary
objective is for the plan to achieve a rate of return sufficient 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 reflective
of future fair values. Furthermore, while the Company believes
the 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 fair value measurement
at the reporting date.
Equity securities did not include any INTL FCStone Inc. common
stock as of September 30, 2014 and 2013, respectively.