Washington Post 2012 Annual Report Download - page 75

unamortized actuarial gains or losses in accumulated other
comprehensive income potentially subject to amortization that were
outside the 10% corridor, and therefore, no amortized gain or loss
amounts were included in the pension credit in 2010. During 2010,
there were pension asset gains offset by a decrease in the discount
rate that resulted in no net unamortized actuarial gains or losses in
accumulated other comprehensive income subject to amortization
outside the 10% corridor, and therefore, no amortized gain or loss
amounts were included in the pension credit in 2011. During 2011,
there was a further decrease in the discount rate offset by pension
asset gains that resulted in net unamortized actuarial losses in
accumulated other comprehensive income subject to amortization
outside the corridor, and therefore, an amortized loss amount of
$9.0 million is included in the pension cost for 2012.
During 2012, there were pension asset gains and a further decrease
in the discount rate. Primarily as a result of the decrease in the
discount rate, the Company currently estimates that there will be net
unamortized actuarial losses in accumulated other comprehensive
income subject to amortization outside the corridor, and therefore, an
amortized loss amount of $9 million is included in the estimated
pension cost for 2013.
Overall, the Company estimates that it will record a net pension cost
of approximately $18 million in 2013.
Note 13 to the Company’s Consolidated Financial Statements provides
additional details surrounding pension costs and related assumptions.
Income Tax Valuation Allowances. Deferred income taxes arise
from temporary differences between the tax and financial statement
recognition of assets and liabilities. In evaluating its ability to
recover deferred tax assets within the jurisdiction from which they
arise, the Company considers all available positive and negative
evidence, including scheduled reversals of deferred tax liabilities,
projected future taxable income, tax planning strategies and recent
financial operations. These assumptions require significant judgment
about forecasts of future taxable income.
As of December 31, 2012, the Company had state income tax net
operating loss carryforwards of $666.7 million, which will expire
at various dates from 2013 through 2032. Also at December 31,
2012, the Company had approximately $93.0 million of non-U.S.
income tax loss carryforwards, of which $84.6 million may be
carried forward indefinitely; $3.0 million of losses that, if unutilized,
will expire in varying amounts through 2017; and $5.4 million of
losses that, if unutilized, will start to expire after 2017. At
December 31, 2012, the Company has established approximately
$78.1 million in valuation allowances against deferred state tax
assets, net of U.S. Federal income taxes, and non-U.S. deferred tax
assets, as the Company believes that it is more likely than not that
the benefit from certain state and non-U.S. net operating loss
carryforwards and other deferred tax assets will not be realized.
The Company has established valuation allowances against state
income tax benefits recognized, without considering potentially
offsetting deferred tax liabilities established with respect to prepaid
pension cost and goodwill. Prepaid pension cost and goodwill
have not been considered a source of future taxable income for
realizing deferred tax benefits recognized since these temporary
differences are not likely to reverse in the foreseeable future. The
valuation allowances established against state and non-U.S.
income tax benefits recorded may increase or decrease within the
next 12 months, based on operating results, the market value of
investment holdings or business and tax planning strategies; as a
result, the Company is unable to estimate the potential tax impact,
given the uncertain operating and market environment. The
Company will be monitoring future operating results and projected
future operating results on a quarterly basis to determine whether
the valuation allowances provided against state and non-U.S.
deferred tax assets should be increased or decreased, as future
circumstances warrant.
Recent Accounting Pronouncements. See Note 2 to the
Company’s Consolidated Financial Statements for a discussion of
recent accounting pronouncements.
2012 FORM 10-K 63