Washington Post 2008 Annual Report Download - page 85

The Company’s earnings per share (basic and diluted) for 2008,
2007 and 2006 are presented below:
Fiscal Year Ended
(in thousands, except
per share amounts) December 28, 2008 December 30, 2007 December 31, 2006
Income before
cumulative effect of
change in accounting
principle, after
redeemable preferred
stock dividends ..... $64,776 $287,655 $328,553
Cumulative effect of
change in method of
accounting for share-
based payments, net
of taxes .......... —— (5,075)
Net income available
for common shares . . $64,776 $287,655 $323,478
Weighted average
shares outstanding—
basic ............ 9,408 9,492 9,568
Effect of dilutive shares:
Stock options and
restricted stock ..... 22 36 38
Weighted average
shares outstanding—
diluted ........... 9,430 9,528 9,606
Basic earnings per
common share:
Before cumulative effect
of change in
accounting
principle .......... $ 6.89 $ 30.31 $ 34.34
Cumulative effect of
change in accounting
principle .......... —— (0.53)
Net income available
for common shares . . $ 6.89 $ 30.31 $ 33.81
Diluted earnings per
common share:
Before cumulative effect
of change in
accounting
principle .......... $ 6.87 $ 30.19 $ 34.21
Cumulative effect of
change in accounting
principle .......... —— (0.53)
Net income available
for common shares . . $ 6.87 $ 30.19 $ 33.68
The 2008, 2007 and 2006 diluted earnings per share amounts
exclude the effects of 29,875, 7,500 and 13,000 stock options
outstanding, respectively, as their inclusion would be antidilutive.
K. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributes to several multi-employer plans on behalf of
certain union-represented employee groups. Substantially all of the
Company’s employees are covered by these plans.
The Company also provides healthcare 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.
Adoption of SFAS 158. The Company’s common shareholders’
equity (accumulated other comprehensive income) increased by
$270 million as a result of the adoption of SFAS 158 in 2006. In
2007, the Company’s common shareholders’ equity increased by
approximately $28 million to $298 million as a result of SFAS
158. In 2008, the Company’s common shareholders’ equity
declined by approximately $378 million to an unrealized loss of
$80 million as a result of SFAS 158.
In 2006, the Company’s investment in affiliates balance declined
by $7.6 million as a result of the adoption of SFAS 158 by
Bowater Mersey Paper Company, in which the Company holds a
49% interest. In 2008 and 2007, the Company’s investment in
affiliates balance increased by $1.1 million and $5.0 million,
respectively, as a result of SFAS 158 adjustments.
Defined Benefit Plans. The Company’s defined benefit pension
plans consist of various pension plans and a Supplemental
Executive Retirement Plan (SERP) offered to certain executives of the
Company.
Newsweek offered a Voluntary Retirement Incentive Program to
certain employees in the first quarter of 2008, and 117 employees
accepted the offer. The Company recorded early retirement
program expense of $28.3 million during 2008, which will be
funded mostly from the assets of the Company’s pension plans. In
November 2008, Newsweek announced another Voluntary
Retirement Incentive Program, which was offered to certain
Newsweek employees. The program includes enhanced retirement
benefits and will be completed by the end of the first quarter of
2009. A total of 43 employees accepted the offer; the cost is
estimated at $6.5 million and will be funded primarily from the
assets of the Company’s pension plans.
The Company offered a Voluntary Retirement Incentive Program in
the first quarter 2008 to some employees of The Washington Post
newspaper and the corporate office; 236 employees have
accepted the offer. The early retirement program expense of $82.8
million was recorded during 2008 and will be funded mostly from
the assets of the Company’s pension plans.
The Washington Post implemented a voluntary early retirement
program to the Mailers employees in 2006; pre-tax charges of
$1.1 million were recorded during 2006 in connection with this
program. Additionally in 2006, the Company implemented a
voluntary early retirement program to a large group of exempt and
Guild-covered employees at The Washington Post and the
corporate office; the offer included an incentive payment, enhanced
2008 FORM 10-K 73