Washington Post 2006 Annual Report Download - page 77

estimated using the Black-Scholes method utilizing the following Balance Sheet at December 31, 2006, are presented in the
assumptions: following table:
December 31, 2006
December 31, 2006 January 1, 2006
Before Adoption Adjustment After Adoption
Expected life (years)ÏÏÏ 0Ó6 1Ó4
Interest rate ÏÏÏÏÏÏÏÏÏÏÏÏ 4.70%Ó5.00% 4.27%Ó4.34% Investment in aÇliates ÏÏÏÏÏÏÏ $ 61,152 $ (7,642) $ 53,510
Volatility ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34.78%Ó46.50% 33.0%Ó38.0% Prepaid pension cost ÏÏÏÏÏÏÏÏÏ 565,262 410,030 975,292
Dividend yieldÏÏÏÏÏÏÏÏÏÏ 0% 0% Accounts payable and
accrued liabilitiesÏÏÏÏÏÏÏÏÏ 502,528 6,847 509,375
Refer to Note A for additional disclosures surrounding stock option Postretirement beneÑts other
accounting. than pensions ÏÏÏÏÏÏÏÏÏÏÏ 153,701 (72,364) 81,337
Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏ 311,126 13,017 324,143
Average Number of Shares Outstanding. Basic earnings
Deferred tax liability ÏÏÏÏÏÏÏÏ 414,857 184,630 599,487
per share are based on the weighted average number of shares of Unrealized gain on pensions
common stock outstanding during each year. Diluted earnings per and other postretirement
common share are based on the weighted average number of beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 270,258 270,258
shares of common stock outstanding each year, adjusted for the
The Company's investment in affiliates balance declined by
dilutive effect of shares issuable under outstanding stock options
$7.6 million as a result of the adoption of SFAS 158 by Bowater
and restricted stock. Basic and diluted weighted average share
Mersey Paper Company, in which the Company holds a 49%
information for 2006, 2005 and 2004 is as follows:
interest.
Basic Diluted
Weighted Dilutive EÅect of Weighted Defined Benefit Plans. The Company's defined benefit pen-
Average Stock Options and Average sion plans consist of various pension plans and a Supplemental
Shares Restricted Stock Shares Executive Retirement Plan (SERP) offered to certain executives of
the Company.
2006 ÏÏÏÏÏÏÏÏÏÏÏ 9,568,392 37,173 9,605,565
2005ÏÏÏÏÏÏÏÏÏÏÏÏ 9,593,837 22,060 9,615,897 The Washington Post implemented a voluntary early retirement
2004ÏÏÏÏÏÏÏÏÏÏÏÏ 9,563,314 28,311 9,591,625 program to the Mailers employees in 2006; pre-tax charges of
The 2006, 2005 and 2004, diluted earnings per share amounts $1.1 million were recorded during 2006 in connection with this
exclude the effects of 13,000, 4,000 and 4,000 stock options program. Additionally in 2006, the Company implemented a volun-
outstanding, respectively, as their inclusion would be antidilutive. tary early retirement program to a large group of exempt and Guild-
covered employees at The Washington Post and the corporate
H. PENSIONS AND OTHER POSTRETIREMENT PLANS office; the offer included an incentive payment, enhanced retirement
benefits and other benefits. The Company recorded pre-tax
The Company maintains various pension and incentive savings plans charges of $49.8 million in connection with this program. Overall,
and contributes to several multi-employer plans on behalf of certain 198 employees accepted voluntary early retirement offers under
union-represented employee groups. Substantially all of the Compa- these two programs.
ny's employees are covered by these plans.
The following table sets forth obligation, asset and funding informa-
The Company also provides health care and life insurance benefits tion for the Company's defined benefit pension plans at Decem-
to certain retired employees. These employees become eligible for ber 31, 2006 and January 1, 2006 (in thousands):
benefits after meeting age and service requirements.
Pension Plans SERP
The Company uses a measurement date of December 31 for its 2006 2005 2006 2005
pension and other postretirement benefit plans.
Change in BeneÑt Obligation
BeneÑt obligation at beginning of year ÏÏÏÏÏ $ 748,873 $ 689,141 $ 51,625 $ 42,751
Adoption of SFAS 158. On December 31, 2006, the Compa-
Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27,298 27,161 1,728 1,496
ny adopted Statement of Financial Accounting Standards No. 158
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43,707 39,989 2,936 2,642
AmendmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 60,695 3,751 1,349 Ì
(SFAS 158), ""Employers' Accounting for Defined Benefit Pension
Actuarial (gain) loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (21,499) 15,272 (2,123) 5,709
and Other Postretirement Plans.'' SFAS 158 requires companies to
BeneÑts paidÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (56,283) (26,441) (1,133) (973)
recognize the funded status of pension and other postretirement
BeneÑt obligation at end of year ÏÏÏ $ 802,791 $ 748,873 $ 54,382 $ 51,625
Change in Plan Assets
benefit plans on their balance sheets at December 31, 2006. The
Fair value of assets at beginning of year ÏÏÏ $1,683,265 $1,588,213 $Ì$Ì
effects of adopting the provisions of SFAS 158 on the Company's
Actual return on plan assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 151,101 121,493 ÌÌ
Employer contributions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ1,133 973
BeneÑts paidÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (56,283) (26,441) (1,133) (973)
Fair value of assets at end of yearÏÏ $1,778,083 $1,683,265 $Ì$Ì
Funded status ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 975,292 $ 934,392 $(54,382) $(51,625)
Unrecognized transition assetÏÏÏÏÏÏÏÏÏÏÏÏÏ (249) Ì
Unrecognized prior service cost ÏÏÏÏÏÏÏÏÏÏ 36,233 2,204
Unrecognized actuarial (gain) loss ÏÏÏÏÏÏÏ (376,907) 16,117
Net amount recognizedÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 593,469 $(33,304)
2006 FORM 10-K 61