Washington Post 2009 Annual Report Download - page 88

managers cannot invest more than 20% of the assets at the time of
purchaseinthestockofBerkshireHathawayormorethan10%ofthe
assets in the securities of any other single issuer, except for obligations
of the U.S. Government, without receiving prior approval by the Plan
administrator. As of December 31, 2009, up to 13% of the assets
could be invested in international stocks, and no less than 9% of the
assets could be invested in fixed-income securities. None of the assets
is managed internally by the Company.
In determining the expected rate of return on plan assets, the Com-
pany considers the relative weighting of plan assets, the historical
performance of total plan assets and individual asset classes and
economic and other indicators of future performance. In addition, the
Company may consult with and consider the input of financial and
other professionals in developing appropriate return benchmarks.
The Company evaluated its defined benefit pension plans’ asset
portfolios for the existence of significant concentrations (defined as
greater than 10% of plan assets) of credit risk as of January 3,
2010. Types of concentrations that were evaluated include, but are
not limited to, investment concentrations in a single entity, type of
industry, foreign country and individual fund. Included in the assets
are $274.3 million and $267.2 million of Berkshire Hathaway
Class A and Class B common stock at December 31, 2009 and
December 31, 2008, respectively. Approximately 41% of the
Berkshire Hathaway common stock was subsequently sold in
February 2010.
The following table presents the Company’s pension plan assets using
the fair value hierarchy as of January 3, 2010. The fair value hierarchy
has three levels based on the reliability of the inputs used to determine
fair value. Level 1 refers to fair values determined based on quoted
prices in active markets for identical assets. Level 2 refers to fair values
estimated using significant other observable inputs, and Level 3
includes fair values estimated using significant unobservable inputs.
(in thousands) Level 1 Level 2 Level 3 Total
Cash equivalents and
other short-term
investments ....... $ 189,986 $42,419 $— $ 232,405
Equity securities
U.S. equities ...... 1,061,957 — — 1,061,957
International
equities ........ 115,153 — — 115,153
Fixed-income securities
Federal agency
mortgage-backed
securities ....... — 4,122 — 4,122
Corporate debt
securities ....... — 17,270 — 17,270
Other fixed
income ........ — 7,987 — 7,987
Total investments ..... $1,367,096 $71,798 $— 1,438,894
Cash ............. 247
Receivables ........ 1,675
Total .............. $1,440,816
Cash equivalents and other short-term investments—These investments
are primarily held in U.S Treasury securities and registered money
market funds. These investments are valued using a market approach
based on the quoted market prices of the security, or inputs that
include quoted market prices for similar instruments, and are
classified as either Level 1 or Level 2 in the valuation hierarchy.
U.S. equities—These investments are held in common and preferred
stock of U.S. and non-U.S. corporations traded on U.S. exchanges.
Common and preferred shares are traded actively on exchanges,
and price quotes for these shares are readily available. These
investments are classified as Level 1 in the valuation hierarchy.
International equities—These investments are held in common and
preferred stock issued by non-U.S. corporations. Common and
preferred shares are traded actively on exchanges, and price
quotes for these shares are readily available. These investments are
classified as Level 1 in the valuation hierarchy.
Federal agency mortgage-backed securities—These investments
consist of fixed-income securities issued by Federal Agencies and
are valued using a bid evaluation process, with bid data provided
by independent pricing sources. These investments are classified as
Level 2 in the valuation hierarchy.
Corporate debt securities—These investments consist of fixed-
income securities issued by U.S. corporations and are valued using
a bid evaluation process, with bid data provided by independent
pricing sources. These investments are classified as Level 2 in the
valuation hierarchy.
Other fixed income—These investments consist of fixed-income
securities issued in private placements and are valued using a bid
evaluation process, with bid data provided by independent pricing
sources. These investments are classified as Level 2 in the valuation
hierarchy.
Other Postretirement Plans. The following table sets forth
obligation, asset and funding information for the Company’s other
postretirement plans at January 3, 2010 and December 28, 2008:
Postretirement Plans
(in thousands) 2009 2008
Change in Benefit Obligation
Benefit obligation at beginning of year .... $ 75,402 $ 86,132
Service cost ........................ 3,871 3,770
Interest cost ........................ 4,168 4,846
Amendments ....................... (1,399) 2,051
Actuarial loss (gain) .................. 10,564 (17,436)
Curtailment gain ..................... (9,073) —
Benefits paid, net of Medicare subsidy .... (4,502) (3,961)
Benefit obligation at end of year ........ $ 79,031 $ 75,402
Change in Plan Assets
Fair value of assets at beginning of year . . . $—$—
Employer contributions ................ 4,612 4,238
Benefits paid ....................... (4,612) (4,238)
Fair value of assets at end of year ....... $—$—
Funded status ....................... $(79,031) $(75,402)
74 THE WASHINGTON POST COMPANY