Neiman Marcus 2009 Annual Report Download - page 125

Table of Contents
Pension Plan Assets and Investment Valuations. Assets held by our Pension Plan aggregated $314.5 million at July 31, 2010 and
$272.0 million at August 1, 2009. The Pension Plan's investments are stated at fair value or estimated fair value, as more fully
described below. Purchases and sales of securities are recorded on the trade date. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Assets held by the Pension Plan are invested in accordance with the provisions of our approved investment policy. The
Pension Plan's strategic asset allocation was structured to reduce volatility through diversification and enhance return to approximate
the amounts and timing of the expected benefit payments. The asset allocation for our Pension Plan at the end of fiscal years 2010 and
2009 and the target allocation for fiscal year 2011, by asset category, are as follows:
Pension Plan
Allocation at
July 31,
2010
Allocation at
July 31,
2009
2011
Target
Allocation
Equity securities 74% 68% 75%
Fixed income securities 26%32%25%
Total 100%100%100%
Changes in the assets held by the Pension Plan in fiscal years 2010 and 2009 are as follows:
Fiscal years
(in thousands) 2010 2009
Fair value of assets at beginning of year $ 271,994 $ 313,427
Actual return on assets 26,593 (44,227)
Contribution 30,000 15,000
Benefits paid (14,121)(12,206)
Fair value of assets at end of year $ 314,466 $ 271,994
Pension Plan investments in common corporate stock, preferred corporate stock, mutual funds, certain U.S. government
securities and certain other investments are classified as Level 1 investments within the fair value hierarchy. Common and preferred
corporate stocks and certain U.S. government securities are stated at fair value as determined by quoted market prices. Investments in
mutual funds are valued at fair value based on quoted market prices, which represent the net asset value of the shares held by the
Pension Plan at year-end.
Pension Plan investments in corporate debt securities, certain U.S. government securities, common/collective trusts, and
certain other investments are classified as Level 2 investments within the fair value hierarchy. Common/collective trusts are valued at
net asset value based on the underlying investments of such trust as determined by the sponsor of the trust. Other Level 2 investments
are valued using updated quotes from market makers or broker-dealers recognized as market participants, information from market
sources integrating relative credit information, observed market movements, and sector news, all of which is applied to pricing
applications and models.
Pension Plan investments in hedge funds and other limited partnerships are classified as Level 3 investments within the fair
value hierarchy. Hedge funds are valued at estimated fair value based on net asset value as determined by the respective fund
manager based on the valuation of the underlying securities. Limited partnership interests in venture capital investments are valued at
estimated fair value based on net asset value as determined by the respective fund investment manager. The hedge funds and limited
partnerships allocate gains, losses, and expenses to the Pension Plan as described in the agreements.
Hedge funds and other limited partnerships are redeemable at net asset value to the extent provided in the documentation
governing the investments. However, these redemption rights may be restricted in accordance with the governing documents.
Redemption of these investments is subject to restrictions including lock-up periods where no redemptions are allowed, restrictions on
redemption frequency and advance notice periods for redemptions. As of July 31, 2010, certain of these investments are generally
subject to lock-up periods, ranging from two to seventeen months, certain of these investments are subject to restrictions on
redemption frequency, ranging from quarterly to every three years, and certain of these investments are subject to advance notice
requirements, ranging from thirty-day notification to ninety-day notification. At July 31, 2010, the Pension Plan had future unfunded
commitments for additional contributions to the limited partnerships of approximately $6.3 million.
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