Harley Davidson 2012 Annual Report Download - page 87

87
The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits related
to continuing operations during the fiscal year ending December 31, 2013. However, the Company is under regular audit by tax
authorities. The Company believes that it has appropriate support for the positions taken on its tax returns and that its annual
tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon
resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.
The Company or one of its subsidiaries files income tax returns in the United States federal and Wisconsin state
jurisdictions and various other state and foreign jurisdictions. The Company is no longer subject to income tax examinations for
Wisconsin state income taxes before 2009 or for United States federal income taxes before 2009.
14. Employee Benefit Plans and Other Postretirement Benefits
The Company has a qualified defined benefit pension plan and several postretirement healthcare benefit plans, which
cover employees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan
agreements (SERPA) with certain employees which were instituted to replace benefits lost under the Tax Revenue
Reconciliation Act of 1993. During 2012, the Company consolidated four qualified defined benefit pension plans into one
qualified pension plan. The consolidation had no impact on participant benefits.
Pension benefits are based primarily on years of service and, for certain plans, levels of compensation. Employees are
eligible to receive postretirement healthcare benefits upon attaining age 55 after rendering at least 10 years of service to the
Company. Some of the plans require employee contributions to partially offset benefit costs.
Obligations and Funded Status:
The following table provides the changes in the benefit obligations, fair value of plan assets and funded status of the
Company’s pension, SERPA and postretirement healthcare plans as of the Company’s December 31, 2012 and 2011
measurement dates (in thousands):
Pension and SERPA Benefits Postretirement
Healthcare Benefits
2012 2011 2012 2011
Change in benefit obligation
Benefit obligation, beginning of period $ 1,570,930 $ 1,390,374 $ 380,625 $ 378,341
Service cost 33,681 37,341 7,413 7,630
Interest cost 83,265 80,805 18,310 19,644
Actuarial losses (gains) 276,069 127,259 23,367 (1,364)
Plan participant contributions 1,459 3,441 1,561 1,527
Early Retirement Reinsurance Program
Proceeds — — — 2,249
Benefits paid, net of Medicare Part D subsidy (93,829)(68,525)(28,049)(27,402)
Net curtailments and settlements — 235 — —
Benefit obligation, end of period 1,871,575 1,570,930 403,227 380,625
Change in plan assets:
Fair value of plan assets, beginning of period 1,253,916 1,105,487 109,160 121,064
Actual return on plan assets 160,731 8,129 13,946 820
Company contributions 216,741 205,383 27,675 14,111
Plan participant contributions 1,459 3,441 1,561 1,527
Benefits paid (93,829)(68,524)(29,236)(28,362)
Fair value of plan assets, end of period 1,539,018 1,253,916 123,106 109,160
Funded status of the plans, December 31 $ (332,557) $ (317,014) $ (280,121) $ (271,465)
Amounts recognized in the Consolidated Balance
Sheets, December 31:
Accrued benefit liability (current liabilities) $(2,263) $ (14,531) $ (2,059) $ (2,883)
Accrued benefit liability (long-term liabilities) (330,294)(302,483)(278,062)(268,582)
Net amount recognized $ (332,557) $ (317,014) $ (280,121) $ (271,465)