Washington Post 2000 Annual Report Download - page 19

The following table sets forth obligation, asset, and funding infor-
mation for the Company’s defined benefit pension and postretirement
plans at December 31, 2000 and January 2, 2000 (in thousands):
Pension Plans Postretirement Benefits
2000 1999 2000 1999
Change in benefit obligation
Benefit obligation at
beginning of year.......................... $ 344,611 $ 338,045 $ 86,938 $ 107,779
Service cost...................................... 14,566 14,756 3,496 3,585
Interest cost ..................................... 24,962 23,584 6,338 6,039
Amendments ................................... 29,442 3,205 1,968 2,379
Actuarial gain .................................. (5,091) (22,281) (1,199) (27,981)
Benefits paid.................................... (17,324) (12,698) (4,298) (4,863)
Benefit obligation at end of year ....... $ 391,166 $ 344,611 $ 93,243 $ 86,938
Change in plan assets
Fair value of assets at
beginning of year.......................... $ 1,119,916 $ 1,308,418 — —
Actual return on plan assets............. 212,293 (175,804) — —
Employer contributions .................... — — $ 4,298 $ 4,863
Benefits paid.................................... (17,324) (12,698) (4,298) (4,863)
Fair value of assets at end of year..... $ 1,314,885 $ 1,119,916 $ — $ —
Funded status.................................. $ 923,719 $ 775,305 $ (93,243) $ (86,938)
Unrecognized transition asset .......... (15,354) (22,941) — —
Unrecognized prior service cost ....... 17,230 18,930 (663) (825)
Unrecognized actuarial gain............. (551,511) (433,476) (34,858) (36,528)
Net prepaid (accrued) cost .............. $ 374,084 $ 337,818 $ (128,764) $(124,291)
The total (income) cost arising from the Company’s defined bene-
fit pension and postretirement plans for the years ended December
31, 2000, January 2, 2000, and January 3, 1999, consists of the fol-
lowing components (in thousands):
Pension Plans Postretirement Plans
2000 1999 1998 2000 1999 1998
Service cost............ $ 14,566 $ 14,756 $ 11,335 $ 3,496 $ 3,585 $ 3,764
Interest cost ........... 24,962 23,584 21,344 6,338 6,039 7,417
Expected return
on assets ............ (85,522) (92,566) (71,814) — — —
Amortization of
transition asset.... (7,585) (7,665) (7,665) — — —
Amortization of prior
service cost......... 2,091 2,110 1,679 (162) (162) (378)
Recognized
actuarial gain...... (10,231) (21,902) (16,876) (2,870) (2,886) (1,379)
Net periodic (benefit)
cost for the year.. (61,719) (81,683) (61,997) 6,802 6,576 9,424
Composing Room
early buyout
expense.............. 25,456 — — 1,968 — —
Total (benefit) cost
for the year ......... $ (36,263) $ (81,683) $ (61,997) $ 8,770 $ 6,576 $ 9,424
The cost for the Company’s defined benefit pension and postre-
tirement plans are actuarially determined. Key assumptions utilized at
December 31, 2000, January 2, 2000, and January 3, 1999 include
the following:
Pension Plans Postretirement Plans
2000 1999 1998 2000 1999 1998
Discount rate ................. 7.5% 7.5% 7.0% 7.5% 7.5% 7.0%
Expected return on
plan assets................. 9.0% 9.0% 9.0% — — —
Rate of compensation
increase ..................... 4.0% 4.0% 4.0% — — —
The assumed healthcare cost trend rate used in measuring the
postretirement benefit obligation at December 31, 2000 was 6.9 per-
cent for pre-age 65 benefits (6.4 percent for post-age 65 benefits)
decreasing to 5 percent in the year 2005 and thereafter.
Assumed healthcare cost trend rates have a significant effect on
the amounts reported for the healthcare plans. A one-percentage
point change in the assumed healthcare cost trend rates would have
the following effects (in thousands):
1% 1%
Increase Decrease
Benefit obligation at end of year.......................... $ 13,917 $ (13,000)
Service cost plus interest cost ............................. 1,544 (1,497)
Contributions to multi-employer pension plans, which are gener-
ally based on hours worked, amounted to $1,100,000 in 2000 and
$2,300,000 in 1999 and 1998.
The Company recorded expense associated with retirement bene-
fits provided under incentive savings plans (primarily 401(k) plans) of
approximately $13,300,000 in 2000, 1999, and 1998.
II ILEASE 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.
At December 31, 2000, future minimum rental payments under
noncancelable operating leases approximate the following (in thousands):
2001.................................................................................... $ 54,800
2002.................................................................................... 47,500
2003.................................................................................... 40,100
2004.................................................................................... 34,300
2005.................................................................................... 28,400
Thereafter ............................................................................ 88,700
$ 293,800
44 The Washington Post Company