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



	SERP
	As of December 31
(in thousands)	2014			2013
Change in Benefit Obligation
Benefit obligation at beginning of year	$	91,169		$	104,062
Service cost	1,493			1,612
Interest cost	4,397			4,148
Amendments	4,022			—
Actuarial loss (gain)	19,168			(9,180		)
Benefits paid	(4,166		)	(4,101		)
Curtailment	—			(2,059		)
Settlement	—			(3,313		)
Benefit Obligation at End of Year	$	116,083		$	91,169
Change in Plan Assets
Fair value of assets at beginning of year	$	—		$	—
Employer contributions and other	4,166			4,101
Benefits paid	(4,166		)	(4,101		)
Fair Value of Assets at End of Year	$	—		$	—
Funded Status	$	(116,083	)	$	(91,169	)

The accumulated benefit obligation for the Company’s pension plans at December 31, 2014 and 2013, was $1,281.5 million and $1,091.1 million, respectively. The accumulated benefit obligation for the Company’s SERP at December 31, 2014 and 2013, was $114.1 million and $89.3 million, respectively. The amounts recognized in the Company’s Consolidated Balance Sheets for its defined benefit pension plans are as follows:



	Pension Plans				SERP
	As of December 31				As of December 31
(in thousands)	2014		2013		2014			2013
Noncurrent asset	$	1,152,488	$	1,245,505	$	—		$	—
Current liability	—		—		(6,275		)	(4,251		)
Noncurrent liability	—		—		(109,808		)	(86,918		)
Recognized Asset (Liability)	$	1,152,488	$	1,245,505	$	(116,083	)	$	(91,169	)

Key assumptions utilized for determining the benefit obligation are as follows:



	Pension Plans				SERP
	As of December 31				As of December 31
	2014		2013		2014		2013
Discount rate	4.0	%	4.8	%	4.0	%	4.8	%
Rate of compensation increase	4.0	%	4.0	%	4.0	%	4.0	%

The Company made no contributions to its pension plans in 2014, 2013 and 2012, and the Company does not expect to make any contributions in 2015. The Company made contributions to its SERP of $4.2 million and $4.1 million for the years ended December 31, 2014 and 2013, respectively. As the plan is unfunded, the Company makes contributions to the SERP based on actual benefit payments.

At December 31, 2014, future estimated benefit payments, excluding charges for early retirement programs, are as follows:



(in thousands)	Pension Plans		SERP
2015	$	87,271	$	6,399
2016	$	80,239	$	5,875
2017	$	78,592	$	5,964
2018	$	77,576	$	6,257
2019	$	78,589	$	6,719
2020–2024	$	398,372	$	34,875

The total cost (benefit) arising from the Company’s defined benefit pension plans, including the portion included in discontinued operations, consists of the following components:



	Pension Plans
	Year Ended December 31
(in thousands)	2014			2013			2012
Service cost	$	27,792		$	46,115		$	40,344
Interest cost	51,825			55,821			59,124
Expected return on assets	(120,472		)	(105,574		)	(96,132		)
Amortization of prior service cost	329			2,809			3,695
Recognized actuarial (gain) loss	(28,880		)	2,756			9,013
Net Periodic (Benefit) Cost for the Year	(69,406		)	1,927			16,044
Curtailment	—			(43,930		)	—
Settlement	—			39,995			—
Early retirement programs and special separation benefit expense	8,374			22,700			8,508
Total (Benefit) Cost for the Year	$	(61,032	)	$	20,692		$	24,552
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Current year actuarial loss (gain)	$	125,866		$	(750,328	)	$	(79,405	)
Amortization of prior service cost	(329		)	(2,809		)	(3,695		)
Recognized net actuarial gain (loss)	28,880			(2,756		)	(9,013		)
Curtailment and settlement	(368		)	94,520			—
Total Recognized in Other Comprehensive Income (Before Tax Effects)	$	154,049		$	(661,373	)	$	(92,113	)
Total Recognized in Total (Benefit) Cost and Other Comprehensive Income (Before Tax Effects)	$	93,017		$	(640,681	)	$	(67,561	)



	SERP
	Year Ended December 31
(in thousands)	2014			2013			2012
Service cost	$	1,493		$	1,612		$	1,467
Interest cost	4,397			4,148			4,241
Amortization of prior service cost	47			55			54
Recognized actuarial loss	1,544			2,481			1,833
Net Periodic Cost for the Year	7,481			8,296			7,595
Special separation benefit expense	2,422			—			—
Settlement	—			(2,575		)	—
Total Cost for the Year	$	9,903		$	5,721		$	7,595
Other Changes in Benefit Obligations Recognized in Other Comprehensive Income
Current year actuarial loss (gain)	$	19,168		$	(9,180	)	$	8,428
Current year prior service cost	1,600			—			—
Amortization of prior service cost	(47		)	(55		)	(54		)
Recognized net actuarial loss	(1,544		)	(2,481		)	(1,833		)
Curtailment and settlement	—			(2,798		)	—
Other adjustments	—			—			745
Total Recognized in Other Comprehensive Income (Before Tax Effects)	$	19,177		$	(14,514	)	$	7,286
Total Recognized in Total Cost and Other Comprehensive Income (Before Tax Effects)	$	29,080		$	(8,793	)	$	14,881

The net periodic cost (benefit) for the Company’s pension plans, as reported above, includes pension cost of $0.2 million, $18.9 million and $24.6 million reported in discontinued operations for 2014, 2013 and 2012, respectively. The net periodic cost for the Company’s SERP, as reported above, includes cost of $0.2 million, $1.0 million and $0.9 million reported in discontinued operations for 2014, 2013 and 2012, respectively. The early retirement programs and special separation benefit expenses are also included in discontinued operations for 2013 and 2012. The 2013 curtailments and settlements are included in the gain on sale of Publishing Subsidiaries, which is also reported in discontinued operations.

The costs for the Company’s defined benefit pension plans are actuarially determined. Below are the key assumptions utilized to determine periodic cost:



	Pension Plans						SERP
	Year Ended December 31						Year Ended December 31
	2014		2013		2012		2014		2013		2012
Discount rate	4.8	%	4.0	%	4.7	%	4.8	%	4.0	%	4.7	%
Expected return on plan assets	6.5	%	6.5	%	6.5	%	—		—		—
Rate of compensation increase	4.0	%	4.0	%	4.0	%	4.0	%	4.0	%	4.0	%

Accumulated other comprehensive income (AOCI) includes the following components of unrecognized net periodic cost for the defined benefit plans:



	Pension Plans						SERP
	As of December 31						As of December 31
(in thousands)	2014			2013			2014			2013
Unrecognized actuarial (gain) loss	$	(685,895	)	$	(840,273	)	$	36,890		$	19,266
Unrecognized prior service cost	1,033			1,362			1,689			136
Gross Amount	(684,862		)	(838,911		)	38,579			19,402
Deferred tax liability (asset)	273,945			335,564			(15,432		)	(7,761		)
Net Amount	$	(410,917	)	$	(503,347	)	$	23,147		$	11,641

During 2015, the Company expects to recognize the following amortization components of net periodic cost for the defined benefit plans:



	2015
(in thousands)	Pension Plans		SERP
Actuarial loss recognition	$	—	$	3,449
Prior service cost recognition	$	324	$	457

Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of a relatively small number of stocks and high-quality fixed-income securities that are held by a third-party trustee. The assets of the Company’s pension plans were allocated as follows:



	As of December 31
	2014		2013
U.S. equities	59	%	58	%
U.S. fixed income	13	%	12	%
International equities	28	%	30	%
	100	%	100	%

Essentially all of the assets are actively managed by two investment companies. The goal of the investment managers is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both of these managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. The investment managers cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway or more than 10% of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval by the Plan administrator. As of December 31, 2014, the managers can invest no more than 24% of the assets in international stocks, at the time the investment is made, and no less than 10% of the assets could be invested in fixed-income securities. None of the assets is managed internally by the Company.

In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks.

The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10% of plan assets) of credit risk as of December 31, 2014. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At December 31, 2014, the pension plan held common stock in two investments that exceeded 10% of total plan assets, valued at $730.6 million, or 30% of total plan assets. At December 31, 2013, the pension plan held common stock in one investment that exceeded 10% of total plan assets, valued at $382.1 million, or 16% of total plan assets. At December 31, 2014 and 2013, the pension plan held investments in one foreign country that exceeded 10% of total plan assets. These investments were valued at $468.0 million and $398.9 million at December 31, 2014 and 2013, respectively, or approximately 19% and 17%, respectively, of total plan assets.

The Company’s pension plan assets measured at fair value on a recurring basis were as follows:



	As of December 31, 2014
(in thousands)	Level 1		Level 2		Total
Cash equivalents and other short-term investments	$	275,963	$	141,083	$	417,046
Equity securities
U.S. equities	1,454,011		—		1,454,011
International equities	691,505		—		691,505
Total Investments	$	2,421,479	$	141,083	$	2,562,562
Payable for settlement of investments purchased					(92,594		)
Total					$	2,469,968



	As of December 31, 2013
(in thousands)	Level 1		Level 2		Total
Cash equivalents and other short-term investments	$	196,757	$	84,706	$	281,463
Equity securities
U.S. equities	1,383,738		—		1,383,738
International equities	699,649		—		699,649
Fixed-income securities
Corporate debt securities	—		5,147		5,147
Total Investments	$	2,280,144	$	89,853	$	2,369,997
Receivables					1,852
Total					$	2,371,849

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:



	1%		1%
(in thousands)	Increase		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 postretirement 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	)

The net periodic cost (benefit), as reported above, includes a benefit of $2.9 million included in discontinued operations in each year for 2013 and 2012. The Company recorded a curtailment gain of $1.3 million in the fourth quarter of 2014 in connection with the exchange of WPLG, and the Separation Incentive Program and VRIP offered to certain Corporate employees. As part of the sale of The Herald, changes were made with respect to its postretirement medical plan, resulting in a $3.5 million settlement gain that is included in discontinued operations, net of tax, for 2013. The remaining 2013 curtailment and settlement gains are included in the gain on sale of Publishing Subsidiaries, which is also reported in discontinued operations. In 2012, the Company offered a VRPI to certain employees of The Washington Post newspaper and recorded early retirement expense of $0.4 million, which is included in discontinued operations.

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, 2014, 2013 and 2012, were 3.80%, 3.30% and 3.90%, respectively. AOCI included the following components of unrecognized net periodic benefit for the postretirement plans:



	As of December 31
(in thousands)	2014			2013
Unrecognized actuarial gain	$	(7,404	)	$	(13,928	)
Unrecognized prior service credit	(1,163		)	(2,306		)
Gross Amount	(8,567		)	(16,234		)
Deferred tax liability	3,427			6,494
Net Amount	$	(5,140	)	$	(9,740	)

During 2015, the Company expects to recognize the following amortization components of net periodic cost for the other postretirement plans:



(in thousands)	2015
Actuarial gain recognition	$	(996	)
Prior service credit recognition	$	(502	)

Multiemployer Pension Plans. In 2014, the Company contributed to one multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covered certain union-represented employees.

In March 2013, the Company recorded a $0.4 million charge as The Herald unilaterally withdrew from the Western Conference Teamsters Pension Trust Fund as a result of the sale of its business. In 2012, The Herald notified the GCIU Employer’s Trust Fund of its unilateral withdrawal from the Plan effective November 30, 2012, and recorded a $0.9 million charge based on an estimate of the withdrawal liability.

The Company’s total contributions to all multiemployer pension plans amounted to $0.1 million in 2014, $0.1 million in 2013 and $0.2 million in 2012.

Savings Plans. The Company recorded expense associated with retirement benefits provided under incentive savings plans (primarily 401(k) plans) of approximately $9.2 million in 2014, $8.7 million in 2013 and $12.2 million in 2012.