Napa Auto Parts 2010 Annual Report Download - page 55

Table of Contents


The fair values of plan assets for the Company’s U.S. pension plans included in the above were $1,294,348,000 and
$1,092,787,000 at December 31, 2010 and 2009, respectively.
The asset allocations for the Company’s funded pension plans at December 31, 2010 and 2009, and the target allocation for 2011,
by asset category were:
 
 
  

Equity securities   64%
Debt securities   35%
Real estate   1%
  100%
The Company’s benefit plan committees in the U.S. and Canada establish investment policies and strategies and regularly monitor
the performance of the funds. The pension plan strategy implemented by the Company’s management is to achieve long-term objectives
and invest the pension assets in accordance with the applicable pension legislation in the U.S. and Canada, as well as fiduciary
standards. The long-term primary objectives for the pension plans are to provide for a reasonable amount of long-term growth of capital,
without undue exposure to risk, protect the assets from erosion of purchasing power, and provide investment results that meet or exceed
the pension plans’ actuarially assumed long-term rates of return. The Company’s investment strategy with respect to pension plan assets
is to generate a return in excess of the passive portfolio benchmark (50% S&P 500 Index, 5% Russell Mid Cap Index, 10% Russell 2000
Index, 5% MSCI EAFE Index, and 30% BarCap U.S. Govt/Credit).
The fair values of the plan assets as of December 31, 2010 and 2009, by asset category, are shown in the tables below. Various
inputs are considered when determining the value of the Company’s pension plan assets. The inputs or methodologies used for valuing
securities are not necessarily an indication of the risk associated with investing in these securities. Level 1 represents observable market
inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 represents other significant observable
inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) Level 3 represents significant unobservable inputs
(including the Company’s own assumptions in determining the fair value of investments).
The valuation methods 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 its 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 are valued at the closing price reported on the active market on
which the individual securities are traded on the last day of the calendar plan year. Debt securities including corporate bonds,
U.S. Government securities, and asset-backed securities are valued using price evaluations reflecting the bid and/or ask sides of the
market for an investment as of the last day of the calendar plan year. Real estate value is based on the last appraised or interim valuation.
The timing of the individual property appraisals is spread throughout the four quarters of the year.
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