Washington Post 2007 Annual Report Download - page 86

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The Company’s earnings per share (basic and diluted) for
2007, 2006 and 2005 are presented below (in thousands,
except per share amounts):
December 30,
2007 December 31,
2006 January 1,
2006
Fiscal Year Ended
Income before cumulative
effect of change in
accounting principle,
after redeemable
preferred stock
dividends .......... $287,655 $328,553 $313,363
Cumulative effect of change
in method of accounting
for share-based
payments, net of taxes . . —(5,075) —
Net income available for
common shares ...... $287,655 $323,478 $313,363
Weighted average shares
outstanding — basic . . . 9,492 9,568 9,594
Effect of dilutive shares:
Stock options and
restricted stock ..... 36 38 22
Weighted average shares
outstanding — diluted . . 9,528 9,606 9,616
Basic earnings per common
share:
Before cumulative effect of
change in accounting
principle .......... $30.31 $ 34.34 $ 32.66
Cumulative effect of change
in accounting principle . . —(0.53) —
Net income available for
common shares ...... $30.31 $ 33.81 $ 32.66
Diluted earnings per
common share:
Before cumulative effect of
change in accounting
principle .......... $30.19 $ 34.21 $ 32.59
Cumulative effect of change
in accounting principle . . —(0.53) —
Net income available for
common shares ...... $30.19 $ 33.68 $ 32.59
The 2007, 2006 and 2005 diluted earnings per share
amounts exclude the effects of 7,500, 13,000 and 4,000
stock options outstanding, respectively, as their inclusion
would be antidilutive.
J. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributes to several multi-employer plans on behalf
of certain union-represented employee groups. Substantially
all of the Company’s employees are covered by these plans.
The Company also provides healthcare and life insurance
benefits to certain retired employees. These employees
become eligible for benefits after meeting age and service
requirements.
The Company uses a measurement date of December 31 for its
pension and other postretirement benefit plans.
Adoption of SFAS 158. On December 31, 2006, the
Company adopted Statement of Financial Accounting
Standards No. 158 (SFAS 158), “Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans.”
SFAS 158 required companies to recognize the funded status
of pension and other postretirement benefit plans on their
balance sheets at December 31, 2006. The effects of
adopting the provisions of SFAS 158 on the Company’s
Balance Sheet at December 31, 2006, are presented in the
following table (in thousands):
Before
Adoption Adjustment
After
Adoption
December 31, 2006
Investment in affiliates .... $ 72,333 $ (7,642) $ 64,691
Prepaid pension cost ..... 565,262 410,030 975,292
Accounts payable and
accrued liabilities ..... 510,969 6,847 517,816
Postretirement benefits other
than pensions . ....... 153,701 (72,364) 81,337
Accrued compensation and
related benefits ....... 221,199 13,017 234,216
Deferred tax liability . . . . . 414,857 184,630 599,487
Unrealized gain on pensions
and other postretirement
benefits ........... — 270,258 270,258
The Company’s investment in affiliates balance declined by
$7.6 million as a result of the adoption of SFAS 158 by
Bowater Mersey Paper Company, in which the Company
holds a 49% interest. In 2007, the Company’s investment in
affiliates balance increased by $5.0 million as a result of the
current year SFAS 158 adjustments.
Defined Benefit Plans. The Company’s defined benefit pension
plans consist of various pension plans and a Supplemental
Executive Retirement Plan (SERP) offered to certain executives
of the Company.
The Washington Post implemented a voluntary early retirement
program to the Mailers employees in 2006; pre-tax charges of
$1.1 million were recorded during 2006 in connection with this
program. Additionally in 2006, the Company implemented a
voluntary early retirement program to a large group of exempt
and Guild-covered employees at The Washington Post and the
corporate office; the offer included an incentive payment,
enhanced retirement benefits and other benefits. The
Company recorded pre-tax charges of $49.8 million in
connection with this program. Overall, 198 employees
accepted voluntary early retirement offers under these two
programs.
70 THE WASHINGTON POST COMPANY