Washington Post 2011 Annual Report Download - page 96

Postretirement Plans
(in thousands) 2011 2010
Change in Plan Assets
Fair value of assets at beginning of year . . . $—$—
Employer contributions ................ 2,286 4,383
Benefits paid, net of Medicare subsidy .... (2,286) (4,383)
Fair value of assets at end of year ....... $—$—
Funded status ...................... $(72,412) $(68,818)
The amounts recognized in the Company’s Consolidated Balance
Sheets for its other postretirement plans at December 31, 2011 and
January 2, 2011 are as follows:
Postretirement Plans
(in thousands) 2011 2010
Current liability ..................... $ (4,548) $ (4,476)
Noncurrent liability ................... (67,864) (64,342)
Recognized liability .................. $(72,412) $(68,818)
The Company recorded a curtailment gain of $8.5 million in 2010
due to the sale of Newsweek; the gain is included in discontinued
operations.
In 2009, the Company made changes to the cable television
division’s retiree health care benefits program, resulting in a $7.7
million curtailment gain. Also in 2009, the Company eliminated life
insurance benefits for new retirees on or after January 1, 2009,
resulting in a $0.7 million curtailment gain.
The discount rates utilized for determining the benefit obligation
at December 31, 2011 and January 2, 2011 for the postretirement
plans were 3.90% and 4.60%, respectively. The assumed health care
cost trend rate used in measuring the postretirement benefit obligation
at December 31, 2011 was 8.5% for pre-age 65, decreasing to
5.0% in the year 2019 and thereafter. The assumed health care cost
trendrateusedinmeasuringthepostretirement benefit obligation at
December 31, 2011 was 20.4% for the post-age 65 Medicare
Advantage Prescription Drug (MA-PD) plan, decreasing to 5.0% in the
year 2021 and thereafter, and was 7.5% for the post-age 65 non
MA-PD plan, decreasing to 5.0% in the year 2017 and thereafter.
Assumed health care cost trend rates have a significant effect on
the amounts reported for the health care plans. A change of one
percentage point in the assumed health care cost trend rates would
have the following effects:
(in thousands) 1% Increase 1% Decrease
Benefit obligation at end of year .......... $5,934 $(5,268)
Service cost plus interest cost ............. $ 728 $ (626)
The Company made contributions to its postretirement benefit plans of
$2.3 million and $4.4 million for the years ended December 31,
2011 and January 2, 2011, respectively. As the plans are unfunded,
the Company makes contributions to its postretirement plans based on
actual benefit payments.
At December 31, 2011, future estimated benefit payments are as
follows:
(in millions) Postretirement Plans
2012 ................................... $ 4.5
2013 ................................... $ 4.8
2014 ................................... $ 5.1
2015 ................................... $ 5.3
2016 ................................... $ 5.6
2017–2021 .............................. $29.8
The total cost (benefit) arising from the Company’s other postretirement
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:
Postretirement Plans
(in thousands) 2011 2010 2009
Service cost .............. $ 2,872 $ 3,275 $ 3,871
Interest cost ............... 3,063 3,934 4,168
Amortization of prior
service credit ............ (5,650) (5,026) (4,607)
Recognized actuarial gain .... (1,921) (2,032) (3,128)
Net periodic (benefit) cost .... (1,636) 151 304
Curtailment gain ........... —(8,583) (8,353)
Total benefit for the year .... $(1,636) $(8,432) $ (8,049)
Other changes in plan assets
and benefit obligations in
other comprehensive income:
Current year actuarial
(gain) loss .............. $ (55) $(3,073) $10,673
Current year prior
service credit ............ —(6,336) (1,399)
Amortization of prior
service credit ............ 5,650 5,026 4,607
Recognized actuarial gain .... 1,921 2,032 3,128
Curtailment loss (gain) ....... —4,953 (719)
Total recognized in other
comprehensive income
(before tax effect) ........ $ 7,516 $ 2,602 $16,290
Totalrecognizedinnet
periodic cost (benefit) and
other comprehensive income
(before tax effect) ........ $ 5,880 $(5,830) $ 8,241
The costs for the Company’s postretirement plans are actuarially
determined. The discount rates utilized to determine periodic cost
for the years ended December 31, 2011, January 2, 2011 and
January 3, 2010 were 4.60%, 5.25% and 5.75%, respectively.
At December 31, 2011 and January 2, 2011, accumulated other
comprehensive income (AOCI) included the following components
of unrecognized net periodic benefit for the postretirement plans,
respectively:
(in thousands) 2011 2010
Unrecognized actuarial gain ........... $(15,510) $(17,376)
Unrecognized prior service credit ........ (31,736) (37,386)
Gross amount ...................... (47,246) (54,762)
Deferred tax liability .................. 18,898 21,905
Net amount ........................ $(28,348) $(32,857)
During 2012, the Company expects to recognize the following
amortization components of net periodic cost for the other
postretirement plans:
(in thousands) 2012
Actuarial gain recognition ......................... $(1,479)
Prior service credit recognition ...................... $(5,607)
84 THE WASHINGTON POST COMPANY