Washington Post 2011 Annual Report Download - page 94

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The total (benefit) cost arising from the Company’s defined benefit
pension plans for the years ended December 31, 2011, January 2,
2011 and January 3, 2010, including a portion included in
discontinued operations, consists of the following components:
Pension Plans
(in thousands) 2011 2010 2009
Servicecost............... $ 27,619 $ 26,976 $ 29,214
Interestcost ............... 60,033 60,329 56,994
Expectedreturnonassets ..... (95,983) (95,340) (98,780)
Amortization of transition asset . . —(29) (42)
Amortization of prior
servicecost ............. 3,605 4,201 4,505
Recognizedactuarialloss ..... ——40
Net periodic benefit for
theyear................ (4,726) (3,863) (8,069)
Early retirement programs
expense ............... 634 —64,541
Specialterminationbenefits .... —5,295 —
Recognition of prior
servicecost ............. —2,369 —
Total (benefit) cost for
the year ................ $ (4,092) $ 3,801 $ 56,472
Other Changes in Plan Assets
and Benefit Obligations
Recognized in Other
Comprehensive Income
Current year actuarial
loss(gain) .............. $ 7,046 $(126,568) $(141,362)
Amortization of transition asset . . —29 42
Amortization of prior
servicecost ............. (1,463) (6,570) (4,505)
Recognizedactuarialloss ..... ——(40)
Totalrecognizedinother
comprehensive income
(before tax effects) ........ $ 5,583 $(133,109) $(145,865)
Totalrecognizedintotalcost
(benefit) and other
comprehensive income
(before tax effects) ........ $ 1,491 $(129,308) $ (89,393)
SERP
(in thousands) 2011 2010 2009
Servicecost............... $ 1,655 $ 1,381 $ 1,334
Interestcost ............... 4,342 4,244 4,128
Planamendment ........... 369 ——
Amortization of prior
servicecost ............. 260 406 446
Recognizedactuarialloss ..... 1,411 1,068 1,676
Total cost for the year ....... $ 8,037 $ 7,099 $ 7,584
Other Changes in Benefit
Obligations Recognized in
Other Comprehensive Income
Currentyearactuarialloss..... $ 9,059 $ 2,656 $ 2,778
Amortization of prior
servicecost ............. (260)(406) (446)
Recognized net actuarial loss . . . (1,411) (877) (1,676)
Totalrecognizedinother
comprehensive income
(before tax effects) ........ $ 7,388 $ 1,373 $ 656
Totalrecognizedintotalcost
and other comprehensive
income (before tax effects) .. $ 15,425 $ 8,472 $ 8,240
The costs for the Company’s defined benefit pension plans are
actuarially determined. Below are the key assumptions utilized to
determine periodic cost for the years ended December 31, 2011,
January 2, 2011 and January 3, 2010:
Pension Plans SERP
2011 2010 2009 2011 2010 2009
Discount rate ........ 5.6% 6.0% 5.75% 5.6% 6.0% 5.75%
Expected return on
plan assets ........ 6.5% 6.5% 6.5% ———
Rate of compensation
increase .......... 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
At December 31, 2011 and January 2, 2011, accumulated other
comprehensive income (AOCI) includes the following components
of unrecognized net periodic cost for the defined benefit plans:
Pension Plans SERP
(in thousands) 2011 2010 2011 2010
Unrecognized
actuarial (gain)
loss ........... $(105,051) $(112,096) $ 26,385 $18,742
Unrecognized prior
service cost ..... 19,626 21,089 245 506
Gross amount ..... (85,425) (91,007) 26,630 19,248
Deferred tax liability
(asset) ......... 34,170 36,403 (10,652) (7,698)
Net amount ....... $ (51,255) $ (54,604) $ 15,978 $11,550
During 2012, the Company expects to recognize the following amor-
tization components of net periodic cost for the defined benefit plans:
2012
(in thousands) Pension Plans SERP
Actuarial loss recognition ............. $6,281 $2,298
Prior service cost recognition ........... $3,695 $ 54
Defined Benefit Plan Assets. The Company’s defined benefit
pension obligations are funded by a portfolio made up of a
relatively small number of stocks and high-quality fixed-income
securities that are held by a third-party trustee. As of December 31,
2011 and December 31, 2010, the assets of the Company’s
pension plans were allocated as follows:
Pension Plan Asset Allocations
December 31,
2011 December 31,
2010
U.S. equities ................ 69% 66%
U.S. fixed income ............ 10% 19%
International equities ........... 21% 15%
Total ...................... 100% 100%
Essentially all of the assets are actively managed by two investment
companies. The goal of the investment managers is to produce
moderate long-term growth in the value of these assets, while
protecting them against large decreases in value. Both of these
managers may invest in a combination of equity and fixed-income
securities and cash. The managers are not permitted to invest in
securities of the Company or in alternative investments. The invest-
ment managers cannot invest more than 20% of the assets at the
time of purchase in the stock of Berkshire Hathaway or more than
10% of the 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, 2011, the
82 THE WASHINGTON POST COMPANY