Kroger 2010 Annual Report Download - page 150

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A-70
NO T E S T O CO N S O L I D A T E D FI N A N C I A L ST A T E M E N T S , CO N T I N U E D
•฀ Mutual฀Funds/Collective฀Trusts:฀The฀collective฀trust฀funds฀are฀public฀investment฀vehicles฀valued฀using฀
a Net Asset Value (NAV) provided by the manager of each fund. The NAV is based on the underlying
net assets owned by the fund, divided by the number of shares outstanding. The NAV’s unit price
is quoted on a private market that is not active. However, the NAV is based on the fair value of the
underlying securities within the fund, which are traded on an active market, and valued at the closing
price reported on the active market on which those individual securities are traded.
•฀ Partnerships/Joint฀Ventures:฀These฀funds฀consist฀primarily฀of฀U.S.฀government฀securities,฀Corporate฀
Bonds, corporate stocks, and derivatives, which are valued in a manner consistent with these types of
investments, noted above.
•฀ Hedge฀ Funds:฀ Hedge฀ funds฀ are฀ private฀ investment฀ vehicles฀ valued฀ using฀ a฀ Net฀ Asset฀ Value฀ (NAV)฀
provided by the manager of each fund. The NAV is based on the underlying net assets owned by
the fund, divided by the number of shares outstanding. The NAV’s unit price is quoted on a private
market that is not active. The NAV is based on the fair value of the underlying securities within the
funds, which are typically traded on an active market, and valued at the closing price reported on
the active market on which those individual securities are traded. For investments not traded on an
active market, or for which a quoted price is not publicly available, a variety of unobservable valuation
methodologies, including discounted cash flow, market multiple and cost valuation approaches,
are employed by the fund manager to value investments. Fair values of all investments are adjusted
annually, if necessary, based on audits of the Hedge Fund financial statements; such adjustments are
reflected in the fair value of the plan’s assets.
•฀ Private฀ Equity:฀ Private฀ Equity฀ investments฀ are฀ valued฀ based฀ on฀ the฀ fair฀ value฀ of฀ the฀ underlying฀
securities within the fund, which include investments both traded on an active market and not traded
on an active market. For those investments that are traded on an active market, the values are based
on the closing price reported on the active market on which those individual securities are traded.
For investments not traded on an active market, or for which a quoted price is not publicly available,
a variety of unobservable valuation methodologies, including discounted cash flow, market multiple
and cost valuation approaches, are employed by the fund manager to value investments. Fair values of
all investments are adjusted annually, if necessary, based on audits of the private equity fund financial
statements; such adjustments are reflected in the fair value of the plan’s assets.
•฀ Real฀ Estate:฀ Real฀ estate฀ investments฀ include฀ investments฀ in฀ real฀ estate฀ funds฀ managed฀ by฀ a฀ fund฀
manager. These investments are valued using a variety of unobservable valuation methodologies,
including discounted cash flow, market multiple and cost valuation approaches.
The 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 Plan believes its valuations
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.
The Company contributed and expensed $119, $115 and $92 to employee 401(k) retirement savings
accounts in 2010, 2009 and 2008, respectively. The 401(k) retirement savings account plan provides to
eligible employees both matching contributions and automatic contributions from the Company based on
participant contributions, plan compensation, and length of service.
The Company also administers other defined contribution plans for eligible employees. The cost of
these plans was $7, $8 and $8 for 2010, 2009 and 2008, respectively.