True Value 2008 Annual Report Download - page 51

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notes to consolidated financial statements
30 :: T RUE VALUE COMPA NY
returns for this portfolio over 30-year periods were calculated
– the calculated 25th and 75th percentile were 4.6% and 6.4%,
respectively. With the inflation assumption (3.0%) and the adjust-
ment for expected fees paid from the pension trust (1.0%), the
25th and 75th percentile nominal yields are 6.6% and 8.4%. The
True Value Company Defined Benefit Pension Plan assumes an
actuarial rate of return of 8.0%.
The average expected future service under the plan during 2008
was approximately 7.20 years.
True Value also contributes to the True Value Company Employee
Savings and Compensation Deferral Plan (the ”401k Plan”) in
accordance with IRS regulations. Under the 401k Plan, each
participant may elect to contribute an amount up to 50% of the
participant’s annual compensation, not to exceed $15.5 for both
2008 and 2007 and $15 for 2006. Also, plan participants who are
50 years of age or older may elect to make additional catch-up
contributions not to exceed $5 for 2008, 2007 and 2006. The
total participants’ deferred compensation including True Value’s
contributions to the participants’ balances may not exceed $46,
$45 and $44 in 2008, 2007 and 2006, respectively. Beginning in
2007, True Value’s 401k Plan for most participants included a
100% guaranteed match up to a total of 5% of the participant’s
annual compensation. Also, based on True Value achieving certain
financial goals and at the discretion of the board of directors, an
additional 1% of most participants’ annual compensation could
be earned. For certain other plan participants covered by certain
collective bargaining agreements in 2008 and 2007, and for all plan
participants previous to 2007, True Value’s 401k Plan included a
guaranteed match of one-third of a participant’s contribution up
to a total of 2% of the participant’s annual compensation. Also,
based on True Value achieving certain financial goals, a match
of greater than one-third of a participant’s contribution could be
earned. The plans for certain other participants covered by certain
collective bargaining agreements were similarly amended by True
Value at later dates between year-end 2006 and September 30,
2008. Therefore, a portion of the 401k Plan for these certain other
plan participants was funded in accordance with the amended
plan and a portion with the plan in effect prior to amendment.
True Value recognized costs of $5,754, $5,134 and $3,103 for 2008,
2007 and 2006, respectively, for the 401k Plan.
12. SEGMENT INFORMATION
True Value is principally engaged as a wholesaler of hardware
and related products and is a manufacturer of paint products.
True Value identifies segments based on management responsi-
bility and the nature of the business activities of each component
of its business. True Value measures segment earnings as oper-
ating earnings including an allocation for interest expense and
income taxes.
($ in thousands)