Washington Post 2005 Annual Report Download - page 72

the assets at the time of purchase in the stock of Berkshire Hathaway plans) of approximately $18.3 million in 2005, $17.6 million in
or more than 10% of the assets in the securities of any other single 2004, and $15.5 million in 2003.
issuer, except for obligations of the U.S. Government, without
I. LEASE AND OTHER COMMITMENTS
receiving prior approval by the Plan administrator.
The Company leases real property under operating agreements.
The total (income) cost arising from the Company's defined benefit
Many of the leases contain renewal options and escalation clauses
pension and postretirement plans for the years ended January 1,
that require payments of additional rent to the extent of increases in
2006, January 2, 2005, and December 28, 2003, consists of the
the related operating costs.
following components (in thousands):
At January 1, 2006, future minimum rental payments under noncan-
Pension Plans Postretirement Plans
celable operating leases approximate the following (in
2005 2004 2003 2005 2004 2003
thousands):
Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 27,161 $ 22,896 $ 19,965 $ 6,026 $ 5,285 $ 5,164
2006ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 95,226
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39,989 37,153 33,696 7,434 7,355 7,395
Expected return on assetsÏÏÏÏÏÏ (104,589) (97,702) (96,116) ÌÌÌ
2007ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 91,109
Amortization of transition assetÏÏ (106) (1,086) (2,189) ÌÌÌ
2008ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 82,649
Amortization of prior service cost 4,716 4,530 4,172 (588) (588) (360)
2009ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 71,907
Recognized actuarial gain ÏÏÏÏÏ (5,085) (7,745) (14,665) (1,061) (995) (1,675)
Net periodic (beneÑt) cost for
2010ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61,703
the year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (37,914) (41,954) (55,137) 11,811 11,057 10,524
ThereafterÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 185,392
Early retirement programs
$587,986
expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,192 132 34,135 ÌÌÌ
Curtailment gain ÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌÌÌÌ (634)
Total (beneÑt) cost for the year $(36,722) $(41,822) $(21,002) $11,811 $11,057 $ 9,890
Minimum payments have not been reduced by minimum sublease
rentals of $4.8 million due in the future under noncancelable
The costs for the Company's defined benefit pension and postretire- subleases.
ment plans are actuarially determined. Below are the key assump-
tions utilized to determine periodic cost for the years ended Rent expense under operating leases included in operating costs
January 1, 2006, January 2, 2005, and December 28, 2003: was approximately $113.0 million, $97.6 million, and $76.8 mil-
Pension Plans Postretirement Plans lion, in 2005, 2004, and 2003, respectively. Sublease income
2005 2004 2003 2005 2004 2003 was approximately $0.8 million, $0.6 million, and $0.6 million in
2005, 2004, and 2003, respectively.
Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.75% 6.25% 6.75% 5.75% 6.25% 6.75%
Expected return on plan assetsÏÏÏ 7.5% 7.5% 7.5% ÌÌÌ The Company's broadcast subsidiaries are parties to certain agree-
Rate of compensation increaseÏÏÏ 4.0% 4.0% 4.0% ÌÌÌ ments that commit them to purchase programming to be produced in
In determining the expected rate of return on plan assets, the future years. At January 1, 2006, such commitments amounted to
Company considers the relative weighting of plan assets, the approximately $97.3 million. If such programs are not produced,
historical performance of total plan assets and individual asset the Company's commitment would expire without obligation.
classes and economic and other indicators of future performance. In
J. ACQUISITIONS, EXCHANGES AND DISPOSITIONS
addition, the Company may consult with and consider the input of
financial and other professionals in developing appropriate return The Company completed business acquisitions and exchanges total-
benchmarks. ing approximately $156.1 million in 2005, $63.9 million in 2004,
and $169.5 million in 2003. All of these acquisitions were account-
In December of 2003, the Medicare Prescription Drug, Improve-
ed for using the purchase method, and accordingly, the assets and
ment, and Modernization Act of 2003 (the Act) was enacted. The
liabilities of the companies acquired have been recorded at their
Act introduced a prescription drug benefit under Medicare, as well
estimated fair values at the date of acquisition. The purchase price
as a federal subsidy to sponsors of retiree health benefit plans that
allocations for these acquisitions mostly comprised goodwill and
provide a benefit that meets certain criteria. The Company's other
other intangibles, and property, plant and equipment.
postretirement plans covering retirees currently provide certain pre-
scription benefits to eligible participants. Overall, the Company's In December 2005, Kaplan announced an agreement to acquire
Postretirement benefit obligation was reduced by about $4.0 million Tribeca Learning Limited, a leading education provider to the
at January 2, 2005 as a result of the Act; the Company's postre- Australian financial services sector. The acquisition is expected to
tirement expense was reduced by about $0.5 million in fiscal year close in the second quarter of 2006.
2005 as a result of the Act.
During 2005, Kaplan acquired ten businesses in its higher educa-
Contributions to multi-employer pension plans, which are generally tion, professional and test preparation divisions for a total of
based on hours worked, amounted to $2.6 million in 2005, $140.1 million, financed with cash and $3.0 million in debt. The
$2.0 million in 2004, and $2.0 million in 2003. largest of these included BISYS Education Services, a provider of
licensing education and compliance solutions for financial service
The Company recorded expense associated with retirement bene-
institutions and professionals, The Kidum Group, the leading provid-
fits provided under incentive savings plans (primarily 401(k)
er of test preparation services in Israel, and Asia Pacific Manage-
56 THE WASHINGTON POST COMPANY