Washington Post 2014 Annual Report Download - page 97

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.
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:
Postretirement Plans
As of December 31
(in thousands) 2014 2013
Change in Benefit Obligation
Benefit obligation at beginning of year .... $ 40,014 $ 63,868
Service cost ........................ 1,500 2,488
Interest cost ........................ 1,448 1,848
Actuarial loss (gain) .................. 4,448 (3,298)
Curtailment ......................... (932) (21,221)
Benefits paid, net of Medicare subsidy .... (4,521) (3,671)
Benefit Obligation at End of Year ........ $ 41,957 $ 40,014
Change in Plan Assets
Fair value of assets at beginning of year . . . $—$—
Employer contributions ................ 4,521 3,671
Benefits paid, net of Medicare subsidy .... (4,521) (3,671)
Fair Value of Assets at End of Year ...... $—$—
Funded Status ...................... $(41,957) $(40,014)
The amounts recognized in the Company’s Consolidated Balance
Sheets for its other postretirement plans are as follows:
Postretirement Plans
As of December 31
(in thousands) 2014 2013
Current liability ..................... $ (3,995) $ (3,795)
Noncurrent liability ................... (37,962) (36,219)
Recognized Liability ................ $(41,957) $(40,014)
The discount rates utilized for determining the benefit obligation
at December 31, 2014 and 2013, for the postretirement plans
were 3.25% and 3.80%, respectively. The assumed health care
cost trend rate used in measuring the postretirement benefit
obligation at December 31, 2014, was 7.50% for pre-age 65,
decreasing to 5.0% in the year 2025 and thereafter. The assumed
health care cost trend rate used in measuring the postretirement
benefit obligation at December 31, 2014, was 14.9% for the post-
age 65 Medicare Advantage Prescription Drug (MA-PD) plan,
decreasing to 5.0% in the year 2021 and thereafter, and was
6.50% for the post-age 65 non MA-PD plan, decreasing to 5.0% in
the year 2021 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 ........... $2,478 $(2,255)
Service cost plus interest cost .............. $ 257 $ (227)
The Company made contributions to its postretirement benefit plans of
$4.5 million and $3.7 million for the years ended December 31,
2014 and 2013, respectively. As the plans are unfunded, the
Company makes contributions to its postretirement plans based on
actual benefit payments.
At December 31, 2014, future estimated benefit payments are as
follows:
(in thousands) Postretirement Plans
2015 .................................... $ 3,995
2016 .................................... $ 4,061
2017 .................................... $ 4,078
2018 .................................... $ 3,946
2019 .................................... $ 3,882
2020–2024 ............................... $18,112
The total (benefit) cost arising from the Company’s other post-
retirement plans consists of the following components:
Postretirement Plans
Year Ended December 31
(in thousands) 2014 2013 2012
Service cost ................. $ 1,500 $ 2,488 $ 3,113
Interest cost ................. 1,448 1,848 2,735
Amortization of prior service
credit .................... (783) (4,247) (5,608)
Recognized actuarial gain ...... (2,076) (2,141) (1,478)
Net Periodic Cost (Benefit) .... 89 (2,052) (1,238)
Curtailment ................. (1,292) (41,623) 438
Settlement .................. —(11,927) —
Total Benefit for the Year ..... $(1,203) $(55,602) $ (800)
Other Changes in Benefit
Obligations Recognized in
Other Comprehensive Income
Current year actuarial loss
(gain) ................... $ 4,448 $ (3,298) $(11,493)
Amortization of prior service
credit .................... 783 4,247 5,608
Recognized actuarial gain ...... 2,076 2,141 1,478
Curtailment and settlement ...... 360 32,329 —
Total Recognized in Other
Comprehensive Income
(Before Tax Effects) ........ $ 7,667 $ 35,419 $ (4,407)
Total Recognized in (Benefit)
Cost and Other
Comprehensive Income
(Before Tax Effect) ......... $ 6,464 $(20,183) $ (5,207)
2014 FORM 10-K 81