Washington Post 2001 Annual Report Download - page 22

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THE WASHINGTON POST COMPANY
The costs for the Company’s defined benefit pension and postretire-
ment plans are actuarially determined. Key assumptions utilized at
December 30, 2001, December 31, 2000, and January 2, 2000 include
the following:
Pension Plans Postretirement Plans
2001 2000 1999 2001 2000 1999
Discount rate 7.0% 7.5% 7.5% 7.0% 7.5% 7.5%
Expected return
on plan assets 7.5% 9.0% 9.0%———
Rate of compensation
increase 4.0% 4.0% 4.0%———
The assumed healthcare cost trend rate used in measuring the postre-
tirement benefit obligation at December 30, 2001 was 6.3 percent for
pre-age 65 benefits (5.9 percent for post-age 65 benefits), decreas-
ing 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. Achange of 1 percentage
point in the assumed healthcare cost trend rates would have the fol-
lowing effects:
1% 1%
(in thousands) Increase Decrease
Benefit obligation at end of year........... $ 15,751 $ (14,713)
Service cost plus interest cost............. 1,654 (1,604)
Contributions to multi-employer pension plans, which are generally
based on hours worked, amounted to $1,800,000 in 2001, $1,100,000
in 2000, and $2,300,000 in 1999.
The Company recorded expense associated with retirement benefits
provided under incentive savings plans (primarily 401(k) plans) of
approximately $14,500,000 in 2001 and $13,300,000 in 2000 and 1999.
I LEASE 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 30, 2001, future minimum rental payments under non-
cancelable operating leases approximate the following:
(in thousands)
2002...................................................... $ 51,770
2003...................................................... 46,780
2004...................................................... 41,030
2005...................................................... 35,253
2006...................................................... 30,417
Thereafter................................................ 72,389
$ 277,639
Minimum payments have not been reduced by minimum sublease
rentals of $4,500,000 due in the future under noncancelable subleases.
Rent expense under operating leases included in operating costs
and expenses was approximately $58,300,000, $49,700,000, and
$33,600,000 in 2001, 2000, and 1999, respectively. Sublease
income was approximately $1,500,000, $1,150,000, and $433,000
in 2001, 2000, and 1999, respectively.
The Company’s broadcast subsidiaries are parties to certain agree-
ments that commit them to purchase programming to be produced
in future years. At December 30, 2001, such commitments amounted
to approximately $59,550,000. If such programs are not produced,
the Company’s commitment would expire without obligation.
JACQUISITIONS, EXCHANGES, AND DISPOSITIONS
The Company completed business acquisitions and exchanges, hav-
ing spent approximately $104,400,000 in 2001, $212,300,000 in 2000
(including assumed debt and related acquisition costs), and
$90,500,000 in 1999. All of these acquisitions were accounted for
using the purchase method, and accordingly, the assets and liabilities
of the companies acquired have been recorded at their estimated fair
values at the date of acquisition. The purchase price allocations for
these acquisitions mostly comprised goodwill and other intangibles.
The Company’s acquisitions in 2001 principally included the purchase
of Southern Maryland Newspapers, a division of Chesapeake
Publishing Corporation, and amounts paid as part of a cable system
exchange with AT&T Broadband. During 2001, the Company also
acquired a provider of CFAexam preparation services and a company
that provides pre-certification training for real estate, insurance, and
securities professionals.
Southern Maryland Newspapers publishes the Maryland
Independent in Charles County, Maryland; The Lexington Park
Enterprise in St. Mary’s County, Maryland; and The Calvert
Recorder in Calvert County, Maryland, with a combined total paid
circulation of approximately 50,000.