Washington Post 2013 Annual Report Download - page 92

Diluted earnings per share excludes the following weighted average
potential common shares, as the effect would be antidilutive, as
computed under the treasury stock method:
Year Ended December 31
(in thousands) 2013 2012 2011
Weighted average restricted
stock ................... 83 44 79
The 2013, 2012 and 2011 diluted earnings per share amounts
exclude the effects of 10,000, 124,694 and 115,294 stock options
outstanding, respectively, as their inclusion would have been anti-
dilutive. The 2013 and 2012 diluted earnings per share amounts also
exclude the effects of 5,500 and 52,200 restricted stock awards,
respectively, as their inclusion would have been antidilutive.
In 2012 and 2011, the Company declared regular dividends
totaling $9.80 and $9.40 per share, respectively. In December
2012, the Company declared and paid an accelerated cash
dividend totaling $9.80 per share, in lieu of regular quarterly
dividends that the Company otherwise would have declared and
paid in calendar year 2013.
14. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributed to multiemployer plans on behalf of certain
union-represented employee groups. Most of the Company’s
employees are covered by these plans. The Company also provides
health care 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.
Sale of Publishing Subsidiaries. On October 1, 2013, as part of the
sale of the Publishing Subsidiaries, the Purchaser assumed the liabilities
related to active employees of the Company’s defined benefit pension
plan, Supplemental Executive Retirement Plan (SERP) and other postre-
tirement plans. In addition to the assumed liabilities, the Company
transferred pension plan assets of $318 million in accordance with the
terms of the sale. As a result of the sale of the Publishing Subsidiaries,
the Company remeasured the accumulated and projected benefit
obligation of the pension, SERP and other postretirement plans as of
October 1, 2013, and recorded curtailment and settlement gains
(losses). The new measurement basis was used for the recognition of the
pension and other postretirement plan cost (credit) recorded in the fourth
quarter of 2013. The curtailment and settlement gains (losses) are
included in the gain on the sale of the Publishing Subsidiaries, which is
included in income (loss) from discontinued operations, net of tax. The
Company excluded the historical pension expense for retirees from the
reclassification of the Publishing Subsidiaries’ results to discontinued
operations, since the associated assets and liabilities will be retained by
the Company.
Defined Benefit Plans. The Company’s defined benefit pension
plans consist of various pension plans and a SERP offered to certain
executives of the Company.
Effective August 1, 2012, the Company’s defined benefit pension
plan was amended to provide most of the current participants with
a new cash balance benefit. The cash balance benefit is funded
from the assets of the Company’s pension plans. As a result of this
benefit, the Company’s matching contribution for its 401(k) Savings
Plans was reduced.
In February 2013, the Company offered a Voluntary Retirement
Incentive Program to certain employees of The Washington Post
newspaper and recorded early retirement expense of $20.4 million.
In addition, The Washington Post newspaper recorded $2.3 million
in special separation benefits for a group of employees in the first
quarter of 2013. The expense for these programs is funded from the
assets of the Company’s pension plans.
In 2012, the Company offered a Voluntary Retirement Incentive
Program to certain employees of The Washington Post newspaper
and recorded early retirement expense of $7.5 million. In addition,
the Company offered a Voluntary Retirement Incentive Program to
certain employees of Post–Newsweek Media and recorded early
retirement expense of $1.0 million. The early retirement program
expense for these programs is funded from the assets of the
Company’s pension plans.
In 2011, the Company offered a Voluntary Retirement Incentive
Program to certain employees of Robinson Terminal Warehouse
Corporation and The Washington Post and recorded early
retirement expense of $0.6 million. The early retirement program
expense for these programs is funded from the assets of the
Company’s pension plans.
The early retirement program and special separation benefit
expenses are included in income (loss) from discontinued
operations, net of tax, for 2013, 2012 and 2011.
The following table sets forth obligation, asset and funding
information for the Company’s defined benefit pension plans:
Pension Plans
As of December 31
(in thousands) 2013 2012
Change in Benefit Obligation
Benefit obligation at beginning of year . . . $1,466,322 $1,279,315
Service cost ...................... 46,115 40,344
Interest cost ...................... 55,821 59,124
Amendments ..................... 22,700 8,508
Actuarial (gain) loss ................ (156,385) 144,286
Benefits paid ..................... (81,162) (65,255)
Curtailment ...................... (55,690) —
Settlement ....................... (171,377) —
Benefit Obligation at End of Year ..... $1,126,344 $1,466,322
Change in Plan Assets
Fair value of assets at beginning of year . . $2,071,145 $1,816,577
Actual return on plan assets .......... 699,518 319,823
Benefits paid ..................... (81,162) (65,255)
Settlement ....................... (317,652) —
Fair Value of Assets at End of Year .... $2,371,849 $2,071,145
Funded Status .................... $1,245,505 $ 604,823
74 GRAHAM HOLDINGS COMPANY