Foot Locker 2012 Annual Report Download - page 84

FOOT LOCKER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Retirement Plans and Other Benefits − (continued)
The target composition of the Company’s Canadian plan assets is 95 percent debt securities and 5 percent
equity. The Company believes that plan assets are invested in a prudent manner with the same overall
objective and investment strategy as noted above for the U.S. pension plan. The bond portfolio is
comprised of government and corporate bonds chosen to match the duration of the pension plan’s benefit
payment obligations. This current asset allocation will limit future volatility with regard to the funded
status of the plan. This allocation has resulted in higher pension expense due to the lower long-term rate of
return associated with fixed-income securities.
Valuation of Investments
Significant portions of plan assets are invested in commingled trust funds. These funds are valued at the
net asset value of units held by the plan at year end. Stocks traded on U.S. security exchanges are valued at
closing market prices on the measurement date.
The fair values of the Company’s U.S. pension plan assets at February 2, 2013 and January 28, 2012 are
as follows:
Level 1 Level 2 Level 3
2012
Total
2011
Total*
(in millions)
Cash and cash equivalents $ — $ 4 $ — $ 4 $ 13
Equity securities:
U.S. large-cap
(1)
— 123 — 123 120
U.S. mid-cap
(1)
— 37 — 37 42
International
(2)
— 80 — 80 72
Corporate stock
(3)
14 — — 14 11
Fixed-income securities:
Long duration corporate and
government bonds
(4)
— 231 — 231 221
Intermediate duration corporate
and government bonds
(5)
— 72 — 72 58
Other types of investments:
Real estate
(6)
—— —— 8
Real estate securities
(7)
— 23 — 23 —
Insurance contracts — 1 — 1 1
Total assets at fair value $ 14 $571 $ — $585 $546
* Each category of plan assets is classified within the same level of the fair value hierarchy for 2012 and 2011.
(1) These categories consist of various managed funds that invest primarily in common stocks, as well as other equity securities
and a combination of other funds.
(2) This category comprises three managed funds that invest primarily in international common stocks, as well as other equity
securities and a combination of other funds.
(3) This category consists of the Company’s common stock.
(4) This category consists of various fixed-income funds that invest primarily in long-term bonds, as well as a combination of other
funds, that together are designed to exceed the performance of related long-term market indices.
(5) This category consists of a fixed-income fund that invests primarily in intermediate duration bonds, as well as a combination of
other funds, that together are designed to track the performance of the Barclays Capital U.S. Intermediate Credit Index.
(6) This category in 2011 consisted of two real estate properties, which were subsequently sold to a wholly owned subsidiary of
the Company during 2012.
(7) This category in 2012 consists of one fund that invests in global real estate securities.
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