Pension Plan

The Company sponsored an unfunded non-qualified defined benefit plan (“SERP”) for certain senior executives. The Company accounted for the SERP in accordance with applicable guidance which required the Company to (a) recognize in its statement of financial position an asset for a plan’s over funded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit post-retirement plan in the year in which the changes occur. The plan assets and benefit obligations were measured as of the Company’s fiscal year end.

On December 26, 2011, the Company's board of directors approved the termination of the SERP effective immediately. Pursuant to this termination, the Company effectuated the termination of the SERP through the payment of lump sum distributions to all SERP participants based upon the actuarial equivalent commuted lump sum value of the full accrued benefit earned by each such participant, using actuarial and other assumptions on December 27, 2012. No assets were held with respect to the SERP, therefore benefits were funded when paid to participants.

The following is a reconciliation of the changes in the projected benefit obligation for the year ended December 31, 2012:



	December 31, 2012
	(in thousands)
Projected benefit obligation, beginning of year	$	11,896
Interest cost	526
Actuarial loss (gain)	(85		)
Benefit payments	(414		)
Settlement payments	(11,923		)
Projected benefit obligation, end of year	$	—

For the year ended December 31, 2012 the Company recorded $2.8 million for the expenses related to the SERP which are included in SG&A and marketing and reservation expense in the accompanying consolidated statements of income.

The following table presents the components of net periodic benefit costs for the year ended December 31, 2012. No periodic benefit costs were incurred during the years ended December 31, 2014 and 2013 due to the 2012 settlement of the SERP:



	Year Ended December 31, 2012
	(in thousands)
Components of net periodic benefit cost:
Interest cost	$	526
Amortization of actuarial loss	128
	654
Settlement loss, net	2,162
Net periodic benefit cost	$	2,816
Weighted average assumption:
Discount rate	4.50		%

As a result of the settlement of the SERP, the Company recognized a net settlement loss totaling $2.2 million during the year ended December 31, 2012. The net settlement loss consisted of an actuarial gain of $0.1 million representing the difference between actuarial calculation of the lump sum distribution to participants and the projected benefit obligation and the reclassification of the unamortized accumulated loss from other comprehensive loss to the net periodic benefit cost totaling $2.3 million. Following the settlement of the SERP, there were no amounts in accumulated other comprehensive income (loss) that have not yet been recognized as a component of net periodic benefit costs.