Washington Post 2009 Annual Report Download - page 86

included in the computation of earnings per share under the two-
class method. The amount attributable to the unvested restricted
stock awards of the Company for 2009 was $612,000, reducing
the net income available for common shares in the basic earnings
per common share computation to $91.2 million. The
implementation of this guidance did not have a material impact on
the earnings per share data of the Company for 2008 and 2007.
L. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributes to several multiemployer plans on behalf of
certain union-represented employee groups. Most of the Company’s
employees are covered by these plans.
The Company also provides health care 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.
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.
In November 2008, Newsweek offered a Voluntary Retirement
Incentive Program to certain employees, and 44 employees
accepted the offer in the first quarter of 2009. Early retirement
program expense of $6.6 million was recorded in 2009, which
will be funded primarily from the assets of the Company’s pension
plans. Newsweek offered a Voluntary Retirement Incentive Program
to certain employees in the first quarter of 2008, and 117
employees accepted the offer. The early retirement program
expense in 2008 totaled $28.3 million, which is being funded
mostly from the assets of the Company’s pension plans.
The Company offered a Voluntary Retirement Incentive Program to
certain employees of The Washington Post newspaper in the first
quarter of 2009. A total of 221 employees accepted the offer, and
early retirement program expense of $56.8 million was recorded in
the second quarter of 2009, which will be funded primarily from
the assets of the Company’s pension plans. In the third quarter of
2009, the Company offered a Voluntary Retirement Incentive
Program to certain employees at Robinson Terminal Warehouse
Corporation; $1.1 million in early retirement program expense was
recorded in the third quarter of 2009, also to be funded from the
assets of the Company’s pension plans. In the first quarter of 2008,
a Voluntary Retirement Incentive Program was also offered to certain
employees of The Washington Post newspaper and the corporate
office; 236 employees accepted the offer; $82.8 million in early
retirement program expense was recorded in 2008, also funded
primarily from the assets of the Company’s pension plans.
The following table sets forth obligation, asset and funding
information for the Company’s defined benefit pension plans at
January 3, 2010 and December 28, 2008:
Pension Plans SERP
(in thousands) 2009 2008 2009 2008
Change in Benefit Obligation
Benefitobligationatbeginningofyear ...... $1,007,277 $ 840,170 $ 69,587 $ 57,462
Service cost ........................ 29,214 27,169 1,334 1,404
Interest cost ........................ 56,994 52,986 4,128 4,141
Amendments ....................... 64,541 105,174 —5,903
Actuarial (gain) loss .................. (45,498) 61,139 2,778 7,304
Benefits paid and other ............... (81,157) (79,361) (3,982) (6,627)
Benefit obligation at end of year ....... $1,031,371 $1,007,277 $ 73,845 $ 69,587
Change in Plan Assets
Fairvalueofassetsatbeginningofyear ..... $1,327,329 $1,874,959 $—$—
Actual return (loss) on plan assets ........ 194,644 (468,269) ——
Employer contributions and other ........ ——3,982 6,627
Benefits paid and other ............... (81,157) (79,361) (3,982) (6,627)
Fair value of assets at end of year ...... $1,440,816 $1,327,329 $—$—
Funded status ...................... $ 409,445 $ 320,052 $(73,845) $(69,587)
The accumulated benefit obligation for the Company’s pension
plans at January 3, 2010 and December 28, 2008, was
$954.8 million and $917.3 million, respectively. The accumulated
benefit obligation for the Company’s SERP at January 3, 2010 and
December 28, 2008 was $67.8 million and $57.8 million,
respectively. The amounts recognized in the Company’s
Consolidated Balance Sheets for its defined benefit pension plans
at January 3, 2010 and December 28, 2008 are as follows:
Pension Plans SERP
(in thousands) 2009 2008 2009 2008
Noncurrent asset .... $409,445 $346,325 $—$—
Current liability ..... ——(3,472) (3,545)
Noncurrent liability . . . —(26,273) (70,373) (66,042)
Recognized asset
(liability) ........ $409,445 $320,052 $(73,845) $(69,587)
Key assumptions utilized for determining the benefit obligation at
January 3, 2010 and December 28, 2008 are as follows:
Pension Plans SERP
2009 2008 2009 2008
Discount rate ................ 6.0% 5.75% 6.0% 6.0%
Rate of compensation increase . . . 4.0% 4.0% 4.0% 4.0%
The Company made no contributions to its pension plans in 2009,
2008 and 2007, and the Company does not expect to make any
contributions in 2010. The Company made contributions to its SERP of
$4.0 million and $6.6 million for the years ended January 3, 2010
and December 28, 2008, respectively, as the plan is unfunded, and
the Company covers benefit payments. The Company makes
contributions to the SERP based on actual benefit payments.
At January 3, 2010, future estimated benefit payments, excluding
charges for early retirement programs, are as follows:
(in millions) Pension Plans SERP
2010 ............................ $ 54.2 $ 3.6
2011 ............................ $ 53.2 $ 3.7
2012 ............................ $ 54.8 $ 4.3
2013 ............................ $ 55.9 $ 4.4
2014 ............................ $ 58.2 $ 4.6
2015–2019 ....................... $323.6 $26.3
72 THE WASHINGTON POST COMPANY