Washington Post 2008 Annual Report Download - page 88

The amounts recognized in the Company’s Consolidated Balance
Sheets for its other postretirement plans at December 28, 2008 and
December 30, 2007:
Postretirement Plans
(in thousands) 2008 2007
Current liability ...................... $ (4,410) $ (5,091)
Non-current liability ................... (70,992) (81,041)
Recognized liability .................. $(75,402) $(86,132)
In 2006 and 2007, the Company amended certain of its
postretirement medical plans to modify the cost sharing between
retirees and the Company; these amendments resulted in a greater
portion of the overall cost of postretirement medical plan expenses
to be paid for by retirees in the future. The amendments resulted in a
significant decrease in the Company’s unrecognized prior service
cost at December 31, 2006 and total costs for 2007.
The discount rates utilized for determining the benefit obligation
at December 28, 2008 and December 30, 2007 for the post-
retirement plans were 5.75% and 5.80%, respectively. The
assumed healthcare cost trend rate used in measuring the post-
retirement benefit obligation at December 28, 2008 was 10.0%
for pre-age 65, decreasing to 5.0% in the year 2019 and
thereafter, and was 9.0% for post-age 65 benefits, decreasing to
5.0% in the year 2017 and thereafter.
Assumed healthcare cost trend rates have a significant effect on the
amounts reported for the healthcare plans. A change of 1 percentage
point in the assumed healthcare cost trend rates would have the
following effects:
(in thousands) 1% Increase 1% Decrease
Benefit obligation at end of year ........... $6,559 $(5,792)
Service cost plus interest cost ............. $ 990 $ (851)
The Company made contributions to its postretirement benefit plans
of $4.2 million and $4.3 million for the years ended December 28,
2008 and December 30, 2007, respectively, as the plans are
unfunded and the Company covers benefit payments. The Company
makes contributions to its postretirement plans based on actual
benefit payments.
At December 28, 2008, future estimated benefit payments, net of
Medicare Subsidy, are as follows:
(in millions) Postretirement Plans
2009 .................................... $ 4.4
2010 .................................... $ 4.8
2011 .................................... $ 5.1
2012 .................................... $ 5.5
2013 .................................... $ 5.8
2014–2018 ............................... $33.1
The total cost arising from the Company’s postretirement plans for
the years ended December 28, 2008, December 30, 2007 and
December 31, 2006, consists of the following components:
Postretirement Plans
(in thousands) 2008 2007 2006
Service cost ................ $ 3,770 $ 3,558 $ 5,270
Interest cost ................ 4,846 4,832 6,611
Amortization of prior service
credit ................... (5,144) (4,860) (2,551)
Recognized actuarial gain ..... (1,485) (1,671) (864)
Total cost for the year ......... $ 1,987 $ 1,859 $ 8,466
Other changes in plan assets
and benefit obligations
recognized in other
comprehensive income:
Current year actuarial gain ..... (17,158) (329)
Current year prior service cost
(credit) .................. 2,051 (4,234)
Amortization of prior service
credit ................... 5,144 4,860
Recognized actuarial gain ..... 1,485 1,671
Total recognized in other
comprehensive income
(before tax effects) ......... $ (8,478) $ 1,968
Total recognized in net periodic
cost and other comprehensive
income
(before tax effects) ......... $ (6,491) $ 3,827 $ 8,466
The costs for the Company’s postretirement plans are actuarially
determined. The discount rates utilized to determine periodic cost for
the years ended December 28, 2008, December 30, 2007 and
December 31, 2006 were 5.80%, 5.85% and 5.60%, respectively.
At December 28, 2008 and December 30, 2007, accumulated
other comprehensive income (AOCI) included the following
components of unrecognized net periodic benefit for the post-
retirement plans, respectively:
(in thousands) December 28, 2008 December 30, 2007
Unrecognized actuarial gain ..... $(28,734) $(13,061)
Unrecognized prior service
credit .................... (44,920) (52,115)
Gross amount ................ (73,654) (65,176)
Deferred tax liability ........... 29,462 26,070
Net amount ................. $(44,192) $(39,106)
During 2009, the Company expects to recognize the following
amortization components of net periodic cost for the postretirement
plans:
(in thousands) 2009
Actuarial gain recognition ......................... $(2,122)
Prior service credit recognition ...................... (4,968)
76 THE WASHINGTON POST COMPANY