Washington Post 2003 Annual Report Download - page 71

plans at December 28, 2003 and December 29, 2002 (in The Company's defined benefit pension obligations are funded by
thousands): a relatively small but diversified mix of stocks and high-quality fixed-
income securities that are held in trust. Essentially all of the assets
Pension Plans Postretirement Plans are managed by two investment companies. None of the assets are
2003 2002 2003 2002 managed internally by the Company or are invested in securities of
the Company. The goal of the investment managers is to produce
Change in BeneÑt Obligation
BeneÑt obligation at beginning of year ÏÏÏ $ 498,952 $ 431,017 $ 112,174 $ 105,392
moderate long-term growth in the value of those assets while
Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,965 17,489 5,164 5,418
protecting them against decreases in value. The investment manag-
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33,696 30,820 7,395 7,997
AmendmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 60,697 28,817 (5,479) (3,130)
ers cannot invest more than 20 percent of the assets at the time of
Actuarial loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 37,339 22,851 6,733 1,487
purchase in the stock of Berkshire Hathaway or more than 10 per-
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (24,875) (32,042) (5,543) (4,990)
cent of the assets in the securities of any other single issuer, except
BeneÑt obligation at end of yearÏÏÏÏÏÏÏÏ $ 625,774 $ 498,952 $ 120,444 $ 112,174
for obligations of the U.S. Government, without receiving prior
Change in Plan Assets
Fair value of assets at beginning of year ÏÏ $1,362,084 $1,427,554 $Ì$Ì approval by the Plan administrator. Over the past five years, the
Actual return on plan assets ÏÏÏÏÏÏÏÏÏÏÏ 227,757 (33,428) ÌÌ
managers together have invested between 65 percent and 85 per-
Employer contributions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ5,543 4,990
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (24,875) (32,042) (5,543) (4,990) cent of the assets in equities. At the end of 2003, 82 percent of the
Fair value of assets at end of year ÏÏÏÏÏÏ $1,564,966 $1,362,084 $Ì$Ì
assets were invested in equities; 25 percent of the assets were
Funded status ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 939,192 $ 863,132 $(120,444) $(112,174) invested in Berkshire Hathaway common stock. The Company's
Unrecognized transition asset ÏÏÏÏÏÏÏÏÏÏ (1,442) (3,631) ÌÌ
retirement plan trust held shares of Berkshire Class A and Class B
Unrecognized prior service cost ÏÏÏÏÏÏÏÏ 46,941 24,553 (8,589) (3,469)
Unrecognized actuarial gain ÏÏÏÏÏÏÏÏÏÏÏ (469,890) (390,268) (11,707) (20,750) common stock with a total market value of $398.2 million and
Net prepaid (accrued) cost ÏÏÏÏÏÏÏÏÏÏ $ 514,801 $ 493,786 $(140,740) $(136,393)
$343.8 million at December 28, 2003 and December 29, 2002,
respectively.
The accumulated benefit obligation for the Company's defined
benefit pension plans at December 28, 2003 and December 29, The total (income) cost arising from the Company's defined benefit
2002 was $548.4 million and $432.9 million, respectively. pension and postretirement plans for the years ended Decem-
ber 28, 2003, December 29, 2002 and December 30, 2001,
Key assumptions utilized for determining the benefit obligation at consists of the following components (in thousands):
December 28, 2003 and December 29, 2002 are as follows:
Pension Plans Postretirement Plans
Postretirement 2003 2002 2001 2003 2002 2001
Pension Plans Plans
2003 2002 2003 2002
Service c ost ÏÏÏÏÏÏÏ $ 19,965 $ 17,489 $ 15,393 $ 5,164 $ 5,418 $ 3,707
Interest cost ÏÏÏÏÏÏÏ 33,696 30,820 27,526 7,395 7,997 6,811
Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6.25% 6.75% 6.25% 6.75%
Expected return on
Rate of compensation increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4.0% 4.0% ÌÌ
assets ÏÏÏÏÏÏÏÏÏÏÏ (96,116) (92,192) (97,567) ÌÌÌ
Amortization of
The assumed health care cost trend rate used in measuring the transition assetÏÏÏ (2,189) (5,221) (6,502) ÌÌÌ
Amortization of
postretirement benefit obligation at December 28, 2003 was
prior service cost 4,172 2,185 2,122 (360) (421) (162)
9.5 percent for both pre-age 65 and post-age 65 benefits, Recognized
actuarial gainÏÏÏÏ (14,665) (17,528) (17,917) (1,675) (2,435) (3,408)
decreasing to 5 percent in the year 2013 and thereafter.
Net periodic
(benefit) cost
Assumed health care cost trend rates have a significant effect on the
for the yearÏÏÏÏÏÏ (55,137) (64,447) (76,945) 10,524 10,559 6,948
Early retirement
amounts reported for the health care plans. A change of 1 percent-
programs
age point in the assumed health care cost trend rates would have
expense ÏÏÏÏÏÏÏÏÏ 34,135 19,001 3,344 ÌÌÌ
Curtailment gainÏÏÏÏ ÌÌÌ(634) ÌÌ
the following effects (in thousands):
Total (benefit)
cost for the year $(21,002) $(45,446) $(73,601) $ 9,890 $10,559 $ 6,948
1% 1%
Increase Decrease The costs for the Company's defined benefit pension and postretire-
ment plans are actuarially determined. Below are the key assump-
BeneÑt obligation at end of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $18,104 $(16,918)
Service cost plus interest costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,990 $ (1,929) tions utilized to determine periodic cost for the years ended Decem-
ber 28, 2003, December 29, 2002 and December 30, 2001:
The Company made no contributions to its defined benefit pension
Pension Plans Postretirement Plans
plans in 2003 and 2002, and the Company does not expect to
2003 2002 2001 2003 2002 2001
make any contributions in 2004 or in the foreseeable future. The
Company made contributions to its postretirement benefit plans of Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6.75% 7.0% 7.5% 6.75% 7.0% 7.5%
$5.5 million and $5.0 million for the years ended December 28, Expected return on plan assetsÏÏÏ 7.5% 7.5% 9.0% ÌÌÌ
Rate of compensation increaseÏÏÏ 4.0% 4.0% 4.0% ÌÌÌ
2003 and December 29, 2002, respectively, as the plans are
unfunded and the Company covers benefit payments. The Compa- In determining the expected rate of return on plan assets, the
ny expects to make contributions for its postretirement plans by Company considers the relative weighting of plan assets, the
funding benefit payments consistent with the assumed heath care historical performance of total plan assets and individual asset
cost trend rates discussed above. classes and economic and other indicators of future performance. In
2003 FORM 10-K 51