Washington Post 2014 Annual Report Download - page 94

Diluted earnings per share excludes the following weighted average
potential common shares, as the effect would be antidilutive, as
computed under the treasury stock method:
Year Ended December 31
(in thousands) 2014 2013 2012
Weighted average restricted
stock .................. 62 83 44
The 2014, 2013 and 2012 diluted earnings per share amounts
exclude the effects of 52,000, 10,000 and 124,694 stock
options outstanding, respectively, as their inclusion would have
been antidilutive. The 2014, 2013 and 2012 diluted earnings per
share amounts also exclude the effects of 5,175, 5,500 and
52,200 restricted stock awards, respectively, as their inclusion
would have been antidilutive.
In 2014 and 2012, the Company declared regular dividends
totaling $10.20 and $9.80 per share, respectively. In December
2012, the Company declared and paid an accelerated cash
dividend totaling $9.80 per share, in lieu of regular quarterly
dividends that the Company otherwise would have declared and
paid in calendar year 2013.
14. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributed to 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.
Sale of Publishing Subsidiaries. On October 1, 2013, as part of
the sale of the Publishing Subsidiaries, the Purchaser assumed the
liabilities related to active employees of the Company’s defined
benefit pension plan, Supplemental Executive Retirement Plan (SERP)
and other postretirement plans. In addition to the assumed liabilities,
the Company transferred pension plan assets of $318 million in
accordance with the terms of the sale. As a result of the sale of the
Publishing Subsidiaries, the Company remeasured the accumulated
and projected benefit obligation of the pension, SERP and other
postretirement plans as of October 1, 2013, and recorded
curtailment and settlement gains (losses). The new measurement
basis was used for the recognition of the pension and other
postretirement plan cost (credit) recorded in the fourth quarter of
2013. The curtailment and settlement gains (losses) are included in
the gain on the sale of the Publishing Subsidiaries, which is
included in income from discontinued operations, net of tax. The
Company excluded the historical pension expense for retirees from
the reclassification of the Publishing Subsidiaries’ results to
discontinued operations, since the associated assets and liabilities
were retained by the Company.
Defined Benefit Plans. The Company’s defined benefit pension
plans consist of various pension plans and a SERP offered to certain
executives of the Company.
In the first quarter of 2014, the Company recorded $4.5 million
related to a Separation Incentive Program for certain Corporate
employees, which is being funded from the assets of the Company’s
pension plan. In the third quarter of 2014, the Company recorded
$3.9 million related to a Voluntary Retirement Incentive Program
(VRIP) for certain Corporate employees, which is being funded from
the assets of the Company’s pension plan. In addition, the
Company recorded a $2.4 million SERP charge related to the VRIP
for certain Corporate employees.
In February 2013, the Company offered a VRIP to certain employees
of The Washington Post newspaper and recorded early retirement
expense of $20.4 million. In addition, The Washington Post
newspaper recorded $2.3 million in special separation benefits for a
group of employees in the first quarter of 2013. The expense for
these programs is funded from the assets of the Company’s pension
plans.
In 2012, the Company offered a VRIP to certain employees of The
Washington Post newspaper and recorded early retirement expense of
$7.5 million. In addition, the Company offered a VRIP to certain
employees of Post–Newsweek Media and recorded early retirement
expense of $1.0 million. The early retirement program expense for these
programs is funded from the assets of the Company’s pension plans.
The 2013 and 2012 early retirement program and special separation
benefit expenses are included in income from discontinued operations,
net of tax.
Effective August 1, 2012, the Company’s defined benefit pension plan
was amended to provide most of the current participants with a new
cash balance benefit. The cash balance benefit is funded from the assets
of the Company’s pension plans. As a result of this benefit, the
Company’s matching contribution for its 401(k) Savings Plans was
reduced.
The following table sets forth obligation, asset and funding
information for the Company’s defined benefit pension plans:
Pension Plans
As of December 31
(in thousands) 2014 2013
Change in Benefit Obligation
Benefit obligation at beginning of year . . . $1,126,344 $1,466,322
Service cost ....................... 27,792 46,115
Interest cost ....................... 51,825 55,821
Amendments ...................... 8,374 22,700
Actuarial loss (gain) ................. 172,548 (156,385)
Benefits paid ...................... (69,854) (81,162)
Curtailment ........................ —(55,690)
Settlement ........................ 451 (171,377)
Benefit Obligation at End of Year .......$1,317,480 $1,126,344
Change in Plan Assets
Fair value of assets at beginning of year . . $2,371,849 $2,071,145
Actual return on plan assets ............ 167,154 699,518
Benefits paid ...................... (69,854) (81,162)
Settlement ........................ 819 (317,652)
Fair Value of Assets at End of Year ....... $2,469,968 $2,371,849
Funded Status ...................... $1,152,488 $1,245,505
78 GRAHAM HOLDINGS COMPANY