Graco 2012 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2012 Graco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

82
term portfolio return is established giving consideration to investment diversification and rebalancing. Peer data and historical
returns are reviewed to assess for reasonableness and appropriateness. The weighted-average expected long-term rates of return
are based on reviews of the target investment allocation and the historical and expected rates of return of the asset classes included
in the pension plans’ target asset allocations.
Other Postretirement Benefit Plans
Several of the Company’s subsidiaries currently provide retiree health care and life insurance benefits for certain employee groups.
The following provides a reconciliation of benefit obligations and funded status of the Company’s other postretirement benefit
plans as of December 31, (in millions, except percentages):
2012 2011
Change in benefit obligation:
Benefit obligation at beginning of year $ 165.2 $ 166.5
Service cost 1.3 1.3
Interest cost 7.1 8.3
Actuarial (gain) loss (2.9) 0.3
Benefits paid, net (11.9)(11.2)
Benefit obligation at end of year $ 158.8 $ 165.2
Funded status and net liability recognized at end of year $ (158.8) $ (165.2)
Amounts recognized in the Consolidated Balance Sheets:
Accrued current benefit cost, included in other accrued liabilities $ (12.9) $ (13.6)
Accrued noncurrent benefit cost, included in other noncurrent liabilities (145.9)(151.6)
Total $ (158.8) $ (165.2)
Amounts recognized in AOCI:
Prior service credit $ 8.4 $ 10.8
Net loss (22.6)(26.6)
AOCI, pretax $ (14.2) $ (15.8)
2012 2011
Weighted-average assumptions used to determine benefit obligation:
Discount rate 3.50% 4.50%
Long-term health care cost trend rate 4.50% 4.50%
There are no plan assets associated with the Company’s other postretirement benefit plans.
Other postretirement benefit costs include the following components for the years ended December 31, (in millions):
2012 2011 2010
Service cost-benefits earned during the year $ 1.3 $ 1.3 $ 1.5
Interest cost on projected benefit obligation 7.1 8.3 9.2
Amortization of:
Prior service benefit (2.4)(2.4)(2.4)
Actuarial loss 1.2 1.2 0.9
Net postretirement benefit costs $ 7.2 $ 8.4 $ 9.2