Kroger 2011 Annual Report Download - page 113

A-58
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
For measurements using significant unobservable inputs (Level 3) during 2011 and 2010, a reconciliation
of the beginning and ending balances is as follows:
Hedge Funds Private Equity Real Estate
Ending balance, January 30, 2010 ............................ $455 $128 $ 49
Contributions into Fund ................................... 80 20 12
Realized gains ........................................... — 7 1
Unrealized gains ......................................... 45 18 4
Distributions ............................................ — (20) (4)
Other .................................................. — (3) —
Ending balance, January 29, 2011 ............................ 580 150 62
Contributions into Fund ................................... 6 27 17
Realized gains ........................................... — 18 3
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) 3 8
Distributions ............................................ — (45) (10)
Other .................................................. — 6 1
Ending balance, January 28, 2012 ............................ $579 $159 $ 81
See Note 7 for a discussion of the levels of the fair value hierarchy. The assets’ fair value measurement
level above is based on the lowest level of any input that is significant to the fair value measurement.
The following is a description of the valuation methods used for the plan’s assets measured at fair value
in the above tables:
•฀ Cash:฀The฀carrying฀value฀approximates฀fair฀value.
•฀ Corporate฀ Stocks:฀ The฀ fair฀ values฀ of฀ these฀ securities฀ are฀ based฀ on฀ observable฀ market฀ quotations฀ for฀
identical assets and are valued at the closing price reported on the active market on which the individual
securities are traded.
•฀ Corporate฀Bonds:฀The฀fair฀values฀of฀these฀securities฀are฀primarily฀based฀on฀observable฀market฀quotations฀
for similar bonds, valued at the closing price reported on the active market on which the individual
securities are traded. When such quoted prices are not available, the bonds are valued using a discounted
cash flow approach using current yields on similar instruments of issuers with similar credit ratings,
including adjustments for certain risks that may not be observable, such as credit and liquidity risks.
•฀ U.S.฀Government฀Securities:฀Certain฀U.S.฀Government฀securities฀are฀valued฀at฀the฀closing฀price฀reported฀
in the active market in which the security is traded. Other U.S. government securities are valued based
on yields currently available on comparable securities of issuers with similar credit ratings. When
quoted prices are not available for similar securities, the security is valued under a discounted cash flow
approach that maximizes observable inputs, such as current yields of similar instruments, but includes
adjustments for certain risks that may not be observable, such as credit and liquidity risks.
•฀ 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.