Washington Post 2011 Annual Report Download - page 95

managers can invest no more than 24% of the assets in international
stocks at the time the investment is made, and no less than 10% 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 Company
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 plan asset portfolio
for the existence of significant concentrations (defined as greater than
10% of plan assets) of credit risk as of December 31, 2011. 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. At December 31, 2011 the pension plan
held common stock in one investment which exceeded 10% of total
plan assets. This investment was valued at $222.4 million and
$134.8 million at December 31, 2011 and December 31, 2010,
respectively, or approximately 12% and 8%, respectively, of total plan
assets. Assets also included $154.0 million and $161.6 million of
Berkshire Hathaway Class A and Class B common stock at
December 31, 2011 and December 31, 2010, respectively. At
December 31, 2011 the pension plan held investments in one foreign
country which exceeded 10% of total plan assets. These investments
were valued at $241.4 million and $155.0 million at December 31,
2011 and December 31, 2010, respectively, or approximately 13%
and 9%, respectively, of total plan assets.
Fair value measurements are determined based on the assumption that
a market participant would use in pricing an asset or liability based on
a three-tiered hierarchy that draws a distinction between market
participant assumptions based on (i) observable inputs, such as quoted
prices in active markets (Level 1); (ii) inputs other than quoted prices in
active markets that are observable either directly or indirectly (Level 2);
and (iii) unobservable inputs that require the Company to use present
value and other valuation techniques in the determination of fair value
(Level 3). Financial assets and liabilities are classified in their entirety
based on the lowest level of input that is significant to the fair value
measure. The Company’s assessment of the significance of a particular
input to the fair value measurements requires judgment and may affect
the valuation of the assets and liabilities being measured and their
placement within the fair value hierarchy.
The Company’s pension plan assets measured at fair value on a
recurring basis were as follows:
(in thousands) Level 1 Level 2 Total
At December 31, 2011
Cash equivalents and other
short-term investments ....... $ 120,101 $ 43,166 $ 163,267
Equity securities
U.S. equities ................ 1,249,079 — 1,249,079
International equities ........ 381,924 — 381,924
Fixed-income securities
U.S. Federal agency mortgage-
backed securities .......... — 1,071 1,071
Corporate debt securities ..... — 9,203 9,203
Other fixed income .......... 2,531 8,121 10,652
Total investments ............. $ 1,753,635 $ 61,561 $ 1,815,196
Receivables .................. 1,381
Total ........................ $ 1,816,577
(in thousands) Level 1 Level 2 Total
AtJanuary2,2011
Cash equivalents and other
short-term investments......... $ 207,929 $68,091 $ 276,020
Equity securities
U.S.equities ............... 1,090,693 —1,090,693
International equities ......... 250,604 —250,604
Fixed-income securities
U.S. Federal agency mortgage-
backedsecurities .......... —1,699 1,699
Corporate debt securities ..... —15,854 15,854
Other fixedincome .......... 7,106 8,338 15,444
Total investments .............. $ 1,556,332 $93,982 $1,650,314
Receivables .................. 1,644
Total........................ $1,651,958
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. corporations and American Depositary Receipts (ADRs)
traded on U.S. exchanges. Common and preferred shares and
ADRs 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.
U.S. 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
2inthevaluationhierarchy.
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 by the U.S. Treasury and in private placements and are valued
using a quoted market price or bid evaluation process, with bid data
provided by independent pricing sources. These investments are
classified as Level 1 or 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 December 31, 2011 and January 2, 2011:
Postretirement Plans
(in thousands) 2011 2010
Change in Benefit Obligation
Benefit obligation atbeginning ofyear .......... $68,818 $79,031
Service cost ............................... 2,872 3,275
Interest cost................................ 3,063 3,934
Amendments ............................... —(6,336)
Actuarial gain.............................. (55) (3,073)
Curtailment gain ............................ —(3,630)
Benefits paid,net ofMedicaresubsidy .......... (2,286) (4,383)
Benefit obligation at end of year .............. $72,412 $68,818
2011 FORM 10-K 83