Washington Post 2010 Annual Report Download - page 96

total net payouts were $85.1 million. The total intrinsic value of options
exercised during 2008 was $67.4 million; a tax benefit from these
stock option exercises of $26.3 million was realized during 2008.
Earnings Per Share. The Company’s earnings per share from
continuing operations (basic and diluted) for 2010, 2009 and
2008 are presented below:
Fiscal Year Ended
(in thousands, except
per share amounts)
January 2,
2011
January 3,
2010
December 28,
2008
Income from continuing
operations attributable to
common shareholders ...... $305,996 $136,933 $95,288
Less: Amount attributable to
participating securities ...... (1,892) (933) —
Basic income from continuing
operations attributable to
common stockholders ...... $304,104 $136,000 $95,288
Plus: Amount attributable to
participating securities ...... 1,892 933 —
Diluted income from continuing
operations attributable to
common stockholders ...... $305,996 $136,933 $95,288
Basic weighted average shares
outstanding ............. 8,869 9,332 9,408
Effect of dilutive shares:
Stock options and
restricted stock ........... 62 60 22
Diluted weighted average
shares outstanding ........ 8,931 9,392 9,430
Income per share from
continuing operations
attributable to common
stockholders:
Basic .................... $ 34.28 $ 14.58 $ 10.13
Diluted ................... $ 34.26 $ 14.58 $ 10.11
In 2009, the Company adopted new guidance that provides that
unvested share-based payment awards containing nonforfeitable
rights to dividends be treated as participating securities and included
in the computation of earnings per share under the two- class method.
The implementation of this guidance did not have a material impact
on the earnings per share amounts of the Company for 2008, and,
therefore, the Company adopted the guidance prospectively.
The 2010, 2009 and 2008 diluted earnings per share amounts
exclude the effects of 30,225, 74,569 and 29,875 stock options
outstanding, respectively, as their inclusion would be antidilutive.
M. 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 connection with the Newsweek sale in 2010, the Company
recorded $5.3 million in special termination benefits expense and
$2.4 million in prior service cost expense; these amounts are
included in discontinued operations.
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 and is
included in discontinued operations. 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 and is
included in discontinued operations. The early retirement program
expense for these programs is 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, funded mostly 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 funded mostly 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 mostly 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 2, 2011 and January 3, 2010:
Pension Plans
(in thousands) 2010 2009
Change in Benefit Obligation
Benefit obligation at beginning of year . . . $1,031,371 $1,007,277
Service cost .................... 26,976 29,214
Interest cost ..................... 60,329 56,994
Amendments .................... 5,295 64,541
Actuarial loss (gain) ............... 53,822 (45,498)
Benefits paid and other ............ (64,588) (81,157)
Benefit obligation at end of year ....$1,113,205 $1,031,371
Change in Plan Assets
Fair value of assets at beginning of
year ......................... $1,440,816 $ 1,327,329
Actual return on plan assets ......... 275,730 194,644
Benefits paid and other ............ (64,588) (81,157)
Fair value of assets at end of year ...$1,651,958 $1,440,816
Funded status ...................$ 538,753 $ 409,445
80 THE WASHINGTON POST COMPANY