Washington Post 2010 Annual Report Download - page 100

benefit obligation at January 2, 2011 was 24.2% for the post-
age 65 Medicare Advantage Prescription Drug (MA-PD) plan,
decreasing to 5.0% in the year 2020 and thereafter, and was
8.5% for the post-age 65 non MA-PD plan, decreasing to 5% in the
year 2017 and thereafter.
Assumed health care cost trend rates have a significant effect on
the amounts reported for the health care plans. A change of one
percentage point in the assumed health care cost trend rates would
have the following effects:
(in thousands) 1% Increase 1% Decrease
Benefit obligation at end of year ........... $5,674 $(5,035)
Service cost plus interest cost ............. $ 714 $ (616)
The Company made contributions to its postretirement benefit plans
of $4.4 million and $4.6 million for the years ended January 2,
2011 and January 3, 2010, respectively. As the plans are
unfunded, the Company makes contributions to its postretirement
plans based on actual benefit payments.
At January 2, 2011, future estimated benefit payments are as
follows:
(in millions) Postretirement Plans
2011 .................................... $ 4.5
2012 .................................... $ 4.8
2013 .................................... $ 5.0
2014 .................................... $ 5.2
2015 .................................... $ 5.4
2016–2020 ............................... $28.8
The total cost arising from the Company’s postretirement plans for
the years ended January 2, 2011, January 3, 2010 and
December 28, 2008, including a portion included in discontinued
operations, consists of the following components:
Postretirement Plans
(in thousands) 2010 2009 2008
Service cost ................. $ 3,275 $ 3,871 $ 3,770
Interest cost ................. 3,934 4,168 4,846
Amortization of prior service
credit .................... (5,026) (4,607) (5,144)
Recognized actuarial gain ...... (2,032) (3,128) (1,485)
Net periodic cost ............. 151 304 1,987
Curtailment gain ............. (8,583) (8,353) —
Total (benefit) cost for the year .. $(8,432) $ (8,049) $ 1,987
Other changes in plan assets and
benefit obligations recognized
in other comprehensive
income:
Current year actuarial
(gain) loss ................ $(3,073) $10,673 $(17,158)
Current year prior service
(credit) cost ............... (6,336) (1,399) 2,051
Amortization of prior service
credit .................... 5,026 4,607 5,144
Recognized actuarial gain ...... 2,032 3,128 1,485
Curtailment loss (gain) ......... 4,953 (719) —
Total recognized in other
comprehensive income
(before tax effects) .......... $ 2,602 $16,290 $ (8,478)
Total recognized in net periodic
(benefit) cost and other
comprehensive income
(before tax effects) .......... $(5,830) $ 8,241 $ (6,491)
The costs for the Company’s postretirement plans are actuarially
determined. The discount rates utilized to determine periodic cost
for the years ended January 2, 2011, January 3, 2010 and
December 28, 2008 were 5.25%, 5.75% and 5.80%, respectively.
At January 2, 2011 and January 3, 2010, accumulated other
comprehensive income (AOCI) included the following components
of unrecognized net periodic benefit for the postretirement plans,
respectively:
(in thousands)
January 2,
2011 January 3, 2010
Unrecognized actuarial gain ............ $(17,376) $(16,336)
Unrecognized prior service credit ......... (37,386) (41,028)
Gross amount ....................... (54,762) (57,364)
Deferred tax liability ................... 21,905 22,946
Net amount ......................... $(32,857) $(34,418)
During 2011, the Company expects to recognize the following
amortization components of net periodic cost for the postretirement
plans:
(in thousands) 2011
Actuarial gain recognition ......................... $(1,921)
Prior service credit recognition ...................... $(5,650)
Multiemployer Pension Plans. Contributions to multiemployer
pension plans, which are generally based on hours worked,
amounted to $1.0 million in 2010, $1.1 million in 2009 and
$1.2 million in 2008.
In recent years, The Washington Post newspaper has contributed to
multiemployer pension plans on behalf of three union-represented
employee groups: the CWA-ITU Negotiated Pension Plan on behalf
of Post mailers, helpers and utility mailers; the IAM National Pension
Fund on behalf of Post machinists; and the Central Pension Fund of
the International Union of Operating Engineers on behalf of Post
engineers, carpenters and painters. Contributions are made in
accordance with the relevant collective bargaining agreements and
are generally based on straight-time hours.
The Post has negotiated in collective bargaining the contractual right
to withdraw from two of these plans; the right to withdraw from the
CWA-ITU Negotiated Pension Plan (the Plan) was the subject of
contract negotiations that reached an impasse. In July 2010, the
Post notified the union and the Plan of its unilateral withdrawal from
the Plan, effective November 30, 2010. In connection with this
action, The Washington Post recorded a $20.4 million charge
based on an estimate of the withdrawal liability. Payment of the
actual withdrawal liability will relieve the Post of further liability to
the Plan absent certain circumstances prescribed by law.
Savings Plans. The Company recorded expense associated with
retirement benefits provided under incentive savings plans (primarily
401(k) plans) of approximately $19.1 million in 2010, $19.9
million in 2009 and $20.2 million in 2008.
N. LEASES AND OTHER COMMITMENTS
The Company leases real property under operating agreements.
Many of the leases contain renewal options and escalation clauses
that require payments of additional rent to the extent of increases in
the related operating costs.
84 THE WASHINGTON POST COMPANY