Harley Davidson 2015 Annual Report Download - page 88

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88
The fair values of the Company’s postretirement healthcare plan assets as of December 31, 2014, were as follows (in
thousands):
Balance as of
December 31, 2014
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 8,033 $ 7,278 $ 755 $ —
Equity holdings:
U.S. companies 75,349 75,349 — —
Foreign companies 15,571 15,050 521 —
Pooled equity funds 19,138 19,138 — —
Private equity/real estate 3,884 15 — 3,869
Total equity holdings 113,942 109,552 521 3,869
Fixed-income holdings:
U.S. Treasuries 11,457 11,457 — —
Federal agencies 1,876 — 1,876 —
Corporate bonds 11,549 — 11,549 —
Pooled fixed income funds 8,996 — 8,996 —
Foreign bonds 770 — 770 —
Municipal bonds 217 — 217 —
Total fixed-income holdings 34,865 11,457 23,408 —
Total postretirement
healthcare plan assets $ 156,840 $ 128,287 $ 24,684 $ 3,869
The following table presents a reconciliation of the fair value measurements using significant unobservable inputs (Level
3) as of December 31, 2014 (in thousands):
Private Equity/
Real Estate
Balance, beginning of period $ —
Actual return on plan assets:
Relating to assets still held at the reporting date (178)
Purchases, sales and settlements 4,047
Balance, end of period $ 3,869
No plan assets are expected to be returned to the Company during the fiscal year ending December 31, 2016.
For 2016, the Company’s overall expected long-term rate of return is 7.5% for pension assets and 7.5% 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:
2015 2014
Healthcare cost trend rate for next year 7.5% 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