XML 43 R21.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Retirement Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract] |
Pension and Other Postretirement Benefits Disclosure [Text Block] | RETIREMENT BENEFIT PLANS Defined Benefit Plans In connection with the February 3, 2006 purchase of all the net assets of the Gradall excavator business, the Company assumed sponsorship of two Gradall non-contributory defined benefit pension plans, both of which are frozen with respect to both future benefit accruals and future new entrants. The Gradall Company Hourly Employees’ Pension Plan covers approximately 330 former employees and 150 current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were covered by a collective bargaining agreement and (iii) first participated in the plan before April 6, 1997. An amendment ceasing all future benefit accruals was effective April 6, 1997. The Gradall Company Employees’ Retirement Plan covers approximately 235 former employees and 94 current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were not covered by a collective bargaining agreement and (iii) first participated in the plan before December 31, 2004. An amendment ceasing future benefit accruals for certain participants was effective December 31, 2004. A second amendment discontinued all future benefit accruals for all participants effective April 24, 2006. The following tables set forth the change in plan assets, change in projected benefit obligation, rate assumptions and components of net periodic benefit cost as of December 31 with respect to these plans. The measurement dates of the assets and liabilities of both plans were December 31 of the respective years presented.
|  | Year Ended December 31, 2011
(in thousands) |  | Hourly Employees’ Pension Plan | Employees’ Retirement Plan | Total
Change in projected benefit obligation |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 9,511 |  | $ | 16,427 |  | $ | 25,938 |
Service cost |  | 8 |  | 4 |  | 12 |
Interest cost |  | 469 |  | 858 |  | 1,327 |
Liability actuarial (gain)/loss |  | 1,098 |  | 2,650 |  | 3,748 |
Benefits paid |  | (632 | ) | (701 | ) | (1,333 | )
Benefit obligation at end of year |  | 10,454 |  | 19,238 |  | 29,692 |
Change in fair value of plan assets |  |  |  |
Fair value of plan assets at beginning of year |  | 6,303 |  | 12,485 |  | 18,788 |
Return on plan assets |  | (73 | ) | (65 | ) | (138 | )
Employer contributions |  | 1,065 |  | 519 |  | 1,584 |
Benefits paid |  | (632 | ) | (702 | ) | (1,334 | )
Fair value of plan assets at end of year |  | 6,663 |  | 12,237 |  | 18,900 |
Underfunded status – December 31, 2011 |  | $ | (3,791 | ) | $ | (7,001 | ) | $ | (10,792 | )
Accumulated benefit obligation – December 31, 2011 |  | $ | 10,454 |  | $ | 19,238 |  | $ | 29,692 |
|  | Year Ended December 31, 2010
(in thousands) |  | Hourly Employees’ Pension Plan | Employees’ Retirement Plan | Total
Change in projected benefit obligation |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 9,067 |  | $ | 15,056 |  | $ | 24,123 |
Service cost |  | 6 |  | 3 |  | 9 |
Interest cost |  | 498 |  | 864 |  | 1,362 |
Liability actuarial (gain)/loss |  | 578 |  | 1,119 |  | 1,697 |
Benefits paid |  | (638 | ) | (615 | ) | (1,253 | )
Benefit obligation at end of year |  | 9,511 |  | 16,427 |  | 25,938 |
Change in fair value of plan assets |  |  |  |
Fair value of plan assets at beginning of year |  | 5,560 |  | 10,922 |  | 16,482 |
Return on plan assets |  | 678 |  | 1,319 |  | 1,997 |
Employer contributions |  | 702 |  | 859 |  | 1,561 |
Benefits paid |  | (638 | ) | (615 | ) | (1,253 | )
Fair value of plan assets at end of year |  | 6,302 |  | 12,485 |  | 18,787 |
Underfunded status – December 31, 2010 |  | $ | (3,209 | ) | $ | (3,942 | ) | $ | (7,151 | )
Accumulated benefit obligation – December 31, 2010 |  | $ | 9,511 |  | $ | 16,427 |  | $ | 25,938 |
The Company recognizes the overfunded or underfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of defined benefit postretirement plans as an asset or liability in its statement of financial position and recognized changes in the funded status in the year in which the changes occur. The Company measures the funded status of a plan as of the date of its year-end statement of financial position. The underfunded status of the plan of $10,792,000 and $7,151,000 as of December 31, 2011 and 2010, respectively, is recognized in the accompanying consolidated balance sheets as long-term accrued pension liability because plan assets are less than the value of benefit obligations expected to be paid. The accumulated benefit obligation for our pension plans represents the actuarial present value of benefits based on employee service and compensation as of a certain date and does not include an assumption about future compensation levels. In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions: Assumptions used to determine benefit obligations at December 31:
|  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan
|  | 2011 | 2010 |  | 2011 | 2010
Discount rate |  | 4.06% | 5.12% |  | 4.18% | 5.30%
Composite rate of compensation increase |  | N/A | N/A |  | N/A | N/A
Assumptions used to determine net periodic benefit cost for the years ended December 31:
|  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan
|  | 2011 | 2010 |  | 2011 | 2010
Discount rate |  | 5.12% | 5.67% |  | 5.30% | 5.83%
Long-term rate of return on plan assets |  | 7.75% | 7.75% |  | 7.75% | 7.75%
Composite rate of compensation increase |  | N/A | N/A |  | N/A | N/A
The Company employs a building block approach in determining the expected long-term rate on return on plan assets. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term market assumptions are determined. The long-term portfolio return is established via a building block approach with proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed to check for reasonability and appropriateness. The following tables present the components of net periodic benefit cost (gains are denoted with parentheses and losses are not):
|  | Year Ended December 31, 2011
(in thousands) |  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan |  | Total
Service cost |  | $ | 8 |  |  | $ | 4 |  |  | $ | 12 |
Interest cost |  | 469 |  |  | 858 |  |  | 1,327 |
Expected return on plan assets |  | (514 | ) |  | (963 | ) |  | (1,477 | )
Amortization of prior service cost |  | — |  |  | — |  |  | — |
Amortization of net (gain)/loss |  | 117 |  |  | 77 |  |  | 194 |
Net periodic benefit cost |  | $ | 80 |  |  | $ | (24 | ) |  | $ | 56 |
|  | Year Ended December 31, 2010
(in thousands) |  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan |  | Total
Service cost |  | $ | 6 |  |  | $ | 3 |  |  | $ | 9 |
Interest cost |  | 499 |  |  | 864 |  |  | 1,363 |
Expected return on plan assets |  | (431 | ) |  | (850 | ) |  | (1,281 | )
Amortization of prior service cost |  | — |  |  | — |  |  | — |
Amortization of net (gain)/loss |  | 96 |  |  | 33 |  |  | 129 |
Net periodic benefit cost |  | $ | 170 |  |  | $ | 50 |  |  | $ | 220 |
The Company estimates that $659,000 of unrecognized actuarial expense will be amortized from accumulated other comprehensive income into net periodic benefit costs during 2012. The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalizations. Other assets such as real estate, private equity, and hedge funds are used judiciously to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies. The pension plans' weighted-average asset allocations as a percentage of plan assets at December 31 are as follows:
|  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan
|  | 2011 | 2010 |  | 2011 | 2010
Equity securities |  | 56% | 47% |  | 56% | 47%
Debt securities |  | 38% | 45% |  | 38% | 45%
Short-term investments |  | 1% | 3% |  | 1% | 3%
Other |  | 5% | 5% |  | 5% | 5%
Total |  | 100% | 100% |  | 100% | 100%
As of December 31, 2011, we used the following valuation techniques to measure fair value for assets. There were no changes to these methodologies during 2011: Level 1 - Assets were valued using the closing price reported in the active market in which the individual security was traded. Level 2 - Assets were valued using quoted prices in markets that are not active, broker dealer quotations, net asset value of shares held by the plans, and other methods by which all significant input were observable at the measurement date. Level 3 - Assets were valued using valuation reports from the respective institutions at the measurement date. The following table presents the hierarchy levels for our postretirement benefit plan investments as of December 31,:
(in thousands) | December 31, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3)
Mutual Funds: |  |  |  |
Small Cap | $ | 1,321 |  | $ | 1,321 |  | $ | — |  | $—
Mid Cap | 1,238 |  | 1,238 |  |  |
Large Cap | 7,130 |  | 7,130 |  |  |
International | 1,835 |  | 1,835 |  |  |
Common/Collective: |  |  |  |
Liability Driven Solution | 2,614 |  | — |  | 2,614 |  | —
Wells Fargo International Equity Index Fund | 906 |  |  | 906 |  |
Wells Fargo Large Cap Growth Index Fund | 1,085 |  |  | 1,085 |  |
Wells Fargo Large Cap Value Index Fund | 1,108 |  |  | 1,108 |  |
Wells Fargo Russell 2000 Index Fund | 656 |  |  | 656 |  |
Wells Fargo S&P Mid Cap Index Fund | 734 |  |  | 734 |  |
Cash & Short-term Investments | 265 |  | 265 |  |  |
Total | $ | 18,892 |  | $ | 11,789 |  | $ | 7,103 |  | $—
(in thousands) | December 31, 2010 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3)
Mutual Funds: |  |  |  |
Small Cap | $ | 1,418 |  | $ | 1,418 |  | $ | — |  | $ | — |
Mid Cap | 1,737 |  | 1,737 |  |  |
Large Cap | 6,567 |  | 6,567 |  |  |
Common/Collective: |  |  |  |
Liability Driven Solution | 4,266 |  | — |  | 4,266 |  | — |
Wells Fargo International Equity Index Fund | 703 |  |  | 703 |  |
Wells Fargo Large Cap Growth Index Fund | 1,273 |  |  | 1,273 |  |
Wells Fargo Large Cap Value Index Fund | 1,223 |  |  | 1,223 |  |
Wells Fargo Russell 2000 Index Fund | 466 |  |  | 466 |  |
Wells Fargo S&P Mid Cap Index Fund | 483 |  |  | 483 |  |
Cash & Short-term Investments | 652 |  | 652 |  |  |
Total | $ | 18,788 |  | $ | 10,374 |  | $ | 8,414 |  | $ | — |
Our interests in the common collective trust investments are managed by one custodian. Consistent with our investment strategy, the custodian has invested the assets across a widely diversified portfolio of U.S. and international equity and fixed income securities. Fair values of each security within the collective trust as of December 31, 2011 were obtained from the custodian and are based on quoted market prices of individual investments; however, since the fund itself does not have immediate liquidity or a quoted market price, these assets are considered Level 2. The common collective funds noted in the above table have estimated fair value using the net asset value per share of investments. Investments can be redeemed immediately at the current net asset value per share based on the fair value of the underlying assets. Redemption frequency is daily. The categories contain investments in equity securities of smaller growing companies, medium-sized U.S. companies, large value-oriented and growth-oriented companies and foreign companies traded on international markets. Expected benefit payments are estimated using the same assumptions used in determining our benefit obligation as of December 31, 2011. The following table illustrates the estimated pension benefit payments which reflect expected future service, as appropriate, that are projected to be paid:
(in thousands) |  | Hourly Employees’ Pension Plan |  | Employees’ Retirement Plan |  | Total
2012 |  | $ | 662 |  |  | $ | 769 |  |  | $ | 1,431 |
2013 |  | 656 |  |  | 803 |  |  | 1,459 |
2014 |  | 654 |  |  | 873 |  |  | 1,527 |
2015 |  | 646 |  |  | 900 |  |  | 1,546 |
2016 |  | 648 |  |  | 945 |  |  | 1,593 |
Years 2017 through 2021 |  | $ | 3,246 |  |  | $ | 5,589 |  |  | $ | 8,835 |
Supplemental Retirement Plan The Board of Directors of the Company adopted the Alamo Group Inc. Supplemental Executive Retirement Plan (the “SERP”), effective as of January 3, 2011. The SERP will benefit certain key management or other highly compensated employees of the Company and/or certain subsidiaries who are selected by the Compensation Committee and approved by the Board to participate. The SERP is intended to provide a benefit from the Company upon retirement, death or disability, or a change in control of the Company. Accordingly, the SERP obligates the Company to pay to a participant a Retirement Benefit (as defined in the SERP) upon the occurrence of certain payment events to the extent a participant has a vested right thereto. A participant’s right to his or her Retirement Benefit becomes vested in the Company’s contributions upon 10 years of Credited Service (as defined in the SERP) or a change in control of the Company. The Retirement Benefit is based on 20% of the final three-year average salary of each participant on or after his or her normal retirement age (65 years of age). In the event of the participant’s death or a change in control, the participant’s vested retirement benefit will be paid in a lump sum to the participant or his or her estate, as applicable, within 90 days after the participant’s death or a change in control, as applicable. In the event the participant is entitled to a benefit from the SERP due to disability, retirement or other termination of employment, the benefit will be paid in monthly installments over a period of fifteen years. The Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates and life expectancies. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits. In connection with the initiation of the SERP, the Company recorded an unfunded long-term liability of $1,964,301, a deferred tax asset of $746,000 and $1,218,301 in accumulated other comprehensive income. The $1,964,301 represents prior service cost which will be amortized over the average remaining service periods of the employees. The prior service cost is included as a component of net periodic pension cost. The prior service cost expected to be amortized for the year ended December 31, 2011 is $263,665. The change in the Projected Benefit Obligation (BPO) as of December 31, 2011 is shown below in thousands:
Benefit obligation at January 1, 2011 |  | $ | — |
Service cost |  | 108 |
Interest cost |  | 103 |
Liability actuarial (gain)/loss |  | 409 |
Plan Amendments |  | 1,964 |
Benefit obligation at December 31, 2011 |  | $ | 2,584 |
The components of net periodic pension expense were as follows in thousands:
|  | 2011
Service Cost |  | $ | 108 |
Interest Cost |  | 103 |
Amortization of Prior Service Cost |  | 264 |
Net Periodic Benefit Cost |  | $ | 475 |
The Net Periodic Pension Expense is based on the following assumptions: 4.04% discount rate; 3% rate of compensation increases and a 7.45 year amortization period for 2011. Future estimated benefits expected to be paid from the plan over the next ten years as follows in thousands:
2012 | $ | 10 |
2013 | 42 |
2014 | 43 |
2015 | 50 |
2016 | 98 |
Years 2017 through 2021 | $ | 1,069 |
Defined Contribution Plans The Company has three defined contribution plans, The Gradall Salaried Employees’ Savings and Investment Plan (“Salary Plan”), The Gradall Hourly Employees’ Savings and Investment Plan (“Hourly Plan”) and The International Association of Machinist and Aerospace Retirement Plan (“IAM Plan”). The Company contributed $356,000 and $269,000 to the IAM Plan for the plan years ended December 31, 2011 and 2010, respectively. The Company converted the Salary Plan into its 401(k) retirement and savings plan and put the Hourly Plan into a separate 401(k) retirement and savings plan. The Company provides a defined contribution 401(k) retirement and savings plan for eligible U.S. employees. Company matching contributions are based on a percentage of employee contributions. Company contributions to the plan during 2011, 2010 and 2009 were $992,000, $481,000, and $1,330,000, respectively. A U.S. subsidiary of the Company had an Hourly Employee Pension Plan of Trust covering collective bargaining which was terminated on December 31, 2006. As of January 1, 2006 the employees were added to the existing 401(k) retirement and salary plan. Three of the Company’s international subsidiaries also participate in a defined contribution and savings plan covering eligible employees. The Company’s international subsidiaries contribute between 3% and 10% of the participant’s salary up to a specific limit. Total contributions made to the above plan were $676,000, $607,000, and $537,000 for the year ended December 31, 2011, 2010 and 2009, respectively.

X
- Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 87 -Paragraph 264 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 158 -Paragraph 7, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS106-2 -Paragraph 20, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Implementation Guide (Q and A) -Number FAS88 -Paragraph 63 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph h -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 30 -Paragraph 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 03-2 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5, 6, 7, 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 8 -Subparagraph m -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph q -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 106 -Paragraph 518 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration