Staples 2015 Annual Report Download - page 150

APPENDIX C
C-33 STAPLES Form 10-K
STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(2) This category includes investments in investment grade fixed income instrument, U.S. dollar denominated debt securities of
emerging market issuers and high yield fixed-income securities that are rated below investment grade. The funds are valued
using the net asset value method in which an average of the market prices for the underlying investments is used to value the
fund. For securities with unobservable inputs, the value is based on discounted future cash flows.
(3) This category includes investments in mortgage-backed and asset-backed securities. The funds are valued using the net
asset value method in which an average of the market prices for the underlying investments is used to value the fund.
(4) This category includes commodities of approximately $(5) million and non-separated investments with insurance companies
of approximately $2 million for the year ended January 31, 2015. Commodities are valued using the net asset value method
in which an average of the market prices for the underlying investments is used; the insurance contracts are based on
discounted future cash flows.
The change in the fair value for the pension assets valued using significant unobservable inputs (Level 3) was due to the following
(in millions):
U.S. Plans International Plans
Balance at January 31, 2015 $9 $44
Actual return on plan assets still held at the reporting date (1) (4)
Translation adjustments — (2)
Balance at January 30, 2016 $8 $38
Expected Benefit Payments and Contributions
The following table presents the expected benefit payments to pension plan participants for the next five years, and the aggregate
for the following five years (in millions):
Pension Plans
U.S. Plans International Plans Total
2016 $2 $41 $43
2017 2 42 44
2018 2 42 44
2019 2 41 43
2020 2 41 43
2021-2025 12 200 212
These payments have been estimated based on the
same assumptions used to measure the plans’ projected
benefit obligation at January 30, 2016 and include benefits
attributable to estimated future compensation increases for
the pension plans.
The 2016 expected benefit payments to plan participants not
covered by the respective plan assets (that is, underfunded
plans) represent a component of other long-term obligations in
the consolidated balance sheet.
Based on current assumptions, the Company expects to
contribute $10 million to its international plan during fiscal 2016.
There are no expected benefit payments and contributions
associated with the other post-retirement benefit plans.
Employees’ 401(k) Savings Plan and Other Defined Contribution Plans
Staples’ Employees’ 401(k) Savings Plan (the “401(k) Plan”)
is available to all United States based employees of Staples
who meet minimum age and length of service requirements.
Contributions by the Company to the 401(k) Plan are made in
cash and vest ratably over a five year period.
The Company’s Supplemental Executive Retirement Plan
(the “SERP Plan”), which is similar in many respects to the
401(k) Plan, is available to certain Company executives and
other highly compensated employees, whose contributions
to the 401(k) Plan are limited, and allows such individuals to
supplement their contributions to the 401(k) Plan by making
pre-tax contributions to the SERP Plan. Company contributions
to the SERP Plan are based on a matching formula and vesting
period similar to the 401(k) Plan. Other income (expense) in the
consolidated statement of income includes a loss of $9 million
in 2015 and a gain of $4 million in 2014 related to investments
associated with the SERP.
The expense associated with the Company’s match for the
Staples 401(k) Savings Plan and for contributions related to
certain foreign defined contribution plans for 2015, 2014 and
2013 was $37 million, $40 million and $41 million, respectively.