Harley Davidson 2014 Annual Report Download - page 89

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The fair values of the Company’s postretirement healthcare plan assets, which did not contain any Level 3 assets, as of
December€31, 2013, were as follows (in thousands):€
Balance as of
December 31, 2013
Quoted€Prices€in
Active€Markets€for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Assets:
Cash and cash equivalents $8,402 $—$8,402
Equity holdings:
U.S. companies 29,365 29,365 —
Foreign companies 18,010 17,630 380
Pooled equity funds 61,134 61,134 —
Total equity holdings 108,509 108,129 380
Fixed-income holdings:
U.S. Treasuries 9,488 9,488 —
Federal agencies 2,579 — 2,579
Corporate bonds 8,685 — 8,685
Pooled fixed income funds 8,977 — 8,977
Foreign bonds 941 — 941
Municipal bonds 294 — 294
Total fixed-income holdings 30,964 9,488 21,476
Total postretirement healthcare plan assets $147,875 $117,617 $30,258
No plan assets are expected to be returned to the Company during the fiscal year ending December€31, 2015.
For 2015, the Company’s overall expected long-term rate of return is 7.75% for pension assets and 7.70% for
postretirement healthcare plan assets. The expected long-term rate of return is based on the portfolio as a whole and not on the
sum of the returns on individual asset categories. The return is based on historical returns adjusted to reflect the current view of
the long-term investment market.
Postretirement Healthcare Cost:
The weighted-average healthcare cost trend rate used in determining the accumulated postretirement benefit obligation of
the healthcare plans was as follows:€
2014 2013
Healthcare cost trend rate for next year 8.0%8.0%
Rate to which the cost trend rate is assumed to decline (the ultimate rate) 5.0%5.0%
Year that the rate reaches the ultimate trend rate 2021 2021
This healthcare cost trend rate assumption can have a significant effect on the amounts reported. A one-percentage-point
change in the assumed healthcare cost trend rate would have the following effects (in thousands):€
One
Percent
Increase
One
Percent
Decrease
Total of service and interest cost components in 2014 $747 $(726)
Accumulated benefit obligation as of December 31, 2014 $12,909 $(12,001)
Future Contributions and Benefit Payments:
No pension plan contributions are required in 2015. The Company expects it will continue to make on-going
contributions related to current benefit payments for SERPA and postretirement healthcare plans in 2015(1).
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