Pier 1 2007 Annual Report Download - page 65

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fiscal 2007. As of March 3, 2007, the trusts’ assets consisted of interest bearing investments of $1,507,000 and
life insurance policies with cash surrender values of $6,906,000 and death benefits of $17,093,000. The
Company owns and is the beneficiary of a number of insurance policies on the lives of current and past key
executives. At the discretion of the Board of Directors such policies could be contributed to these trusts or to
the trusts established for purpose of setting aside funds to be used to satisfy obligations arising from
supplemental retirement plans described below. The cash surrender value of these unrestricted policies was
$13,421,000 at March 3, 2007, and the death benefit was $20,851,000. These amounts are consolidated in the
Company’s financial statements in other noncurrent assets. The trust assets are restricted and may only be used
to satisfy requirement obligations to plan participants.
The Company maintains supplemental retirement plans (the “Plans”) for certain of its executive officers.
The Plans provide that upon death, disability, reaching retirement age and certain termination events, a
participant will receive benefits based on highest compensation and years of service. The Company recorded
expenses related to the Plans of $15,112,000, $8,934,000 and $4,378,000 in fiscal 2007, 2006 and 2005,
respectively.
The Plans are not funded and thus have no plan assets. However, a trust has been established for the
purpose of setting aside funds to be used to settle the defined benefit plan obligations upon retirement or death
of certain participants. The trust assets are consolidated in the Company’s financial statements and consist of
interest bearing investments in the amounts of $6,123,000 included in other current assets at March 3, 2007,
and $22,379,000 included in other noncurrent assets at February 25, 2006, and earned average rates of return
of 5.0%, 3.4% and 1.4% in fiscal 2007, 2006 and 2005, respectively. These investments are restricted and may
only be used to satisfy retirement obligations to certain participants. The Company has accounted for these
restricted investments as available-for-sale securities. Cash contributions of $8,212,000 were made to the trust
in fiscal 2007. Any future contributions will be made at the discretion of the Board of Directors. Restricted
investments from the trust were sold to fund retirement benefits of $25,707,000 and $3,226,000 in fiscal 2007
and 2006, respectively. Funds from the trust will be used to fund or partially fund benefit payments through
fiscal year 2017 that are expected to total approximately $9,286,000. Of this amount, the Company expects to
pay $6,285,000 during fiscal 2008, $13,000 during fiscal 2009, $18,000 during fiscal 2010, $35,000 during
fiscal 2011, $61,000 during fiscal 2012 and $2,874,000 during fiscal years 2013 through 2017.
63
Pier 1 Imports, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)