Retirement Plans - LIN Television

12 Months Ended

Dec. 31, 2012

Retirement Plans

Note 11—Retirement Plans

401(k) Plan

        We provide a defined contribution plan ("401(k) Plan") for eligible employees. Effective January 1, 2010, we began making a 3% non-elective contribution for all eligible employees, which vests 100% after two years of service. Historically, we made contributions to the 401(k) Plan on behalf of employee groups that were not covered by our defined benefit retirement plan matching 50% of the employee's contribution up to 6% of the employee's total annual compensation. These contributions vested in 20% annual increments until the employee was 100% vested after five years of service. Company contributions to our 401(k) Plan were suspended during 2009 and were resumed effective January 1, 2010. We contributed $3.9 million, $3.6 million and $3.5 million to the 401(k) Plan in the years ended December 31, 2012, 2011 and 2010, respectively. Effective July 1, 2010, we also made available to certain employees, including our executive officers, the LIN Television Corporation Supplemental Income Deferral Plan. This plan provides benefits to highly compensated employees in circumstances in which the maximum limits established under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code prevent them from receiving Company contributions. We contributed $0.5 million, $0.2 million and $0.4 million to this plan during the years ended December 31, 2012, 2011 and 2010, respectively.

Supplemental Income Deferral Plan

        Effective as of July 1, 2010, eligible executives, are entitled to participate in the Supplemental Income Deferral Plan ("SIDP"). The SIDP allows eligible executive officers to defer 5% - 80% of their base salaries and 5% - 100% of their annual non-equity incentive awards on a tax-deferred basis and receive tax-deferred market-based growth. In 2012, the Company made contributions to the SIDP for each of the named executive officers in amounts equal to 5% of their base salary and non-equity incentive plan compensation.

Retirement Plan

        We have historically provided a defined benefit retirement plan to our employees who did not receive matching contributions from our Company to their 401(k) Plan accounts. Our defined benefit plan was a non-contributory plan under which we made contributions either to: a) traditional plan participants based on periodic actuarial valuations, which are expensed over the expected average remaining service lives of current employees; or b) cash balance plan participants based on 5% of each participant's eligible compensation.

        Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however we continue to fund our existing vested obligations. We contributed $7.4 million, $5.4 million and $5.4 million to our pension plan during the years ended December 31, 2012, 2011 and 2010, respectively. We anticipate contributing $5.4 million to this plan in 2013.

        We record the unfunded status of our defined benefit plan as a liability. For the years ended December 31, 2012 and December 31, 2011, each plan was underfunded. The plan assets and benefit obligations of our defined benefit plan are recorded at fair value as of December 31, 2012. Information regarding the change in the projected benefit obligation, the accumulated benefit obligation and the change in the fair value of plan assets for our traditional defined benefit plan and our cash balance plan are as follows (in thousands):

	Year Ended December 31,
	2012			2011
Change in projected benefit obligation
Projected benefit obligation, beginning of period	$	133,047		$	116,587
Service cost		—			—
Interest cost		5,379			5,872
Actuarial loss		1,485			15,098
Benefits paid		(4,942	)		(4,510	)
Curtailment		—			—
Projected benefit obligation, end of period	$	134,969		$	133,047
Accumulated benefit obligation	$	134,969		$	133,047
Change in plan assets
Fair value of plan assets, beginning of period	$	82,314		$	78,046
Actual return on plan assets		11,621			3,419
Employer contributions		7,419			5,359
Benefits paid		(4,942	)		(4,510	)
Fair value of plan assets, end of period	$	96,412		$	82,314
Unfunded status of the plan	$	(38,557	)	$	(50,733	)
Total amount recognized as accrued benefit liability	$	(38,557	)	$	(50,733	)

        The following table includes the pension related accounts recognized on our consolidated balance sheets and the components of accumulated other comprehensive loss related to the net periodic pension benefit costs as follows (in thousands):

	December 31,
	2012			2011
Other accrued expenses (current)	$	(373	)	$	(391	)
Other liabilities (long-term)		(38,184	)		(50,342	)
Total amount recognized as accrued pension benefit liability	$	(38,557	)	$	(50,733	)
Accumulated other comprehensive loss:
Net loss, net of tax benefit of $13,594 and $15,727 for the years ended December 31, 2012 and 2011, respectively	$	29,624		$	33,017
Pension tax liability		5,760			5,760
Accumulated other comprehensive loss related to net periodic pension benefit cost	$	35,384		$	38,777

        The total net loss of $29.6 million, which is net of tax, relates to deferred actuarial losses from changes in discount rates, differences between actual and assumed asset returns, and differences between actual and assumed demographic experience (rates of turnover, retirement rates, mortality rates and prior to the plan freeze, rates of compensation increases). During 2013, we expect to amortize net losses of $1.7 million, which are included in accumulated other comprehensive loss as of December 31, 2012.

        The following table includes other changes in plan assets and benefit obligations that were recognized in other comprehensive income (loss) (in thousands):

	December 31,
	2012		2011
Net gain (loss)	$	3,947	$	(18,503	)
Amortization of net actuarial loss		1,578		753
Total amount recognized in other comprehensive income (loss)	$	5,525	$	(17,750	)

        Components of net periodic pension benefit cost were (in thousands):

	Year Ended December 31,
	2012			2011			2010
Service cost	$	—		$	—		$	—
Interest cost		5,379			5,872			6,092
Expected return on plan assets		(6,190	)		(6,824	)		(6,446	)
Amortization of prior service cost		—			—			—
Amortization of net loss		1,579			754			376
Net periodic benefit cost	$	768		$	(198	)	$	22

        Our expected future pension benefit payments for the next 10 years are as follows (in thousands):

	Expected Future Pension Benefit Payments
For Years Ended December 31,
2013	$	5,551
2014		5,630
2015		5,849
2016		5,991
2017		6,001
2018 through 2022		36,961

        Weighted-average assumptions used to estimate our pension benefit obligations and to determine our net periodic pension benefit cost are as follows:

	Year Ended December 31,
	2012		2011		2010
Discount rate used to estimate our pension benefit obligation		3.60% - 4.00%		3.90% - 4.20%		5.25	%
Discount rate used to determine net periodic pension benefit		3.90% - 4.20%		5.25%		5.75	%
Rate of compensation increase		N/A		N/A		N/A
Expected long-term rate-of-return on plan assets		7.00%		7.00%		8.00	%

        For the discount rate for the years ended December 31, 2012 and 2011, we used a custom bond modeler that develops a hypothetical portfolio of high quality corporate bonds, rated AA- and above by Standard & Poor's, that could be purchased to settle the obligations of the plan. The yield on this hypothetical portfolio represents a reasonable rate to value our plan liability. Prior to 2011, we used the Citigroup Pension Discount Curve to aid in the selection of our discount rate, which we believe reflects the weighted rate of a theoretical high quality bond portfolio consistent with the duration of the cash flows related to our pension liability.

        We considered the current levels of expected returns on a risk-free investment, the historical levels of risk premium associated with each of our pension asset classes, the expected future returns for each of our pension asset classes and then weighted each asset class based on our pension plan asset allocation to derive an expected long-term return on pension plan assets. During the years ended December 31, 2012, 2011 and 2010, our actual rate of return on plan assets was 15.4%, 4.04% and 12.3%.

        Our investment objective is to achieve a consistent total rate-of-return that will equal or exceed our actuarial assumptions and to equal or exceed the benchmarks that we use for each of our pension plan asset classes. The following asset allocation is designed to create a diversified portfolio of pension plan assets that is consistent with our target asset allocation and risk policy:

	Target Allocation			Percentage of Plan Assets as of December 31,
Asset Category	2012			2012			2011
Equity securities		60	%		55	%		60	%
Debt securities		40	%		45	%		40	%
		100	%		100	%		100	%

        The following table summarizes our pension plan assets measured at fair value using the prescribed three-level fair value hierarchy as of December 31, 2012 and 2011 (in thousands):

	Significant Observable Inputs
	(Level 2)		Total
December 31, 2012:
Money market fund	$	1,092	$	1,092
Commingled pools:
U.S. equity		30,034		30,034
International equity		15,241		15,241
REIT		3,875		3,875
High yield bond		2,916		2,916
Emerging markets		6,374		6,374
Investment grade fixed income		36,880		36,880
Total	$	96,412	$	96,412
December 31, 2011:
Money market fund	$	462	$	462
Commingled pools:
U.S. equity		26,573		26,573
International equity		9,757		9,757
REIT		3,390		3,390
High yield bond		2,914		2,914
Emerging markets		6,652		6,652
Investment grade fixed income		32,566		32,566
Total	$	82,314	$	82,314

        The commingled pools, U.S. and International stock funds and U.S. bond funds consist of various funds that are valued at the net asset value of units held by the plan at year-end as determined by the custodian, based on fair value of the underlying securities. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, while we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in different fair value measurement as of the reporting date.

LIN Television Corporation

Retirement Plans

Note 11—Retirement Plans

401(k) Plan

        We provide a defined contribution plan ("401(k) Plan") for eligible employees. Effective January 1, 2010, we began making a 3% non-elective contribution for all eligible employees, which vests 100% after two years of service. Historically, we made contributions to the 401(k) Plan on behalf of employee groups that were not covered by our defined benefit retirement plan matching 50% of the employee's contribution up to 6% of the employee's total annual compensation. These contributions vested in 20% annual increments until the employee was 100% vested after five years of service. Company contributions to our 401(k) Plan were suspended during 2009 and were resumed effective January 1, 2010. We contributed $3.9 million, $3.6 million and $3.5 million to the 401(k) Plan in the years ended December 31, 2012, 2011 and 2010, respectively. Effective July 1, 2010, we also made available to certain employees, including our executive officers, the LIN Television Corporation Supplemental Income Deferral Plan. This plan provides benefits to highly compensated employees in circumstances in which the maximum limits established under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code prevent them from receiving Company contributions. We contributed $0.5 million, $0.2 million and $0.4 million to this plan during the years ended December 31, 2012, 2011 and 2010, respectively.

Supplemental Income Deferral Plan

        Effective as of July 1, 2010, eligible executives, are entitled to participate in the Supplemental Income Deferral Plan ("SIDP"). The SIDP allows eligible executive officers to defer 5% - 80% of their base salaries and 5% - 100% of their annual non-equity incentive awards on a tax-deferred basis and receive tax-deferred market-based growth. In 2012, the Company made contributions to the SIDP for each of the named executive officers in amounts equal to 5% of their base salary and non-equity incentive plan compensation.

Retirement Plan

        We have historically provided a defined benefit retirement plan to our employees who did not receive matching contributions from our Company to their 401(k) Plan accounts. Our defined benefit plan was a non-contributory plan under which we made contributions either to: a) traditional plan participants based on periodic actuarial valuations, which are expensed over the expected average remaining service lives of current employees; or b) cash balance plan participants based on 5% of each participant's eligible compensation.

        Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however we continue to fund our existing vested obligations. We contributed $7.4 million, $5.4 million and $5.4 million to our pension plan during the years ended December 31, 2012, 2011 and 2010, respectively. We anticipate contributing $5.4 million to this plan in 2013.

        We record the unfunded status of our defined benefit plan as a liability. For the years ended December 31, 2012 and December 31, 2011, each plan was underfunded. The plan assets and benefit obligations of our defined benefit plan are recorded at fair value as of December 31, 2012. Information regarding the change in the projected benefit obligation, the accumulated benefit obligation and the change in the fair value of plan assets for our traditional defined benefit plan and our cash balance plan are as follows (in thousands):

	Year Ended December 31,
	2012			2011
Change in projected benefit obligation
Projected benefit obligation, beginning of period	$	133,047		$	116,587
Service cost		—			—
Interest cost		5,379			5,872
Actuarial loss		1,485			15,098
Benefits paid		(4,942	)		(4,510	)
Curtailment		—			—
Projected benefit obligation, end of period	$	134,969		$	133,047
Accumulated benefit obligation	$	134,969		$	133,047
Change in plan assets
Fair value of plan assets, beginning of period	$	82,314		$	78,046
Actual return on plan assets		11,621			3,419
Employer contributions		7,419			5,359
Benefits paid		(4,942	)		(4,510	)
Fair value of plan assets, end of period	$	96,412		$	82,314
Unfunded status of the plan	$	(38,557	)	$	(50,733	)
Total amount recognized as accrued benefit liability	$	(38,557	)	$	(50,733	)

        The following table includes the pension related accounts recognized on our consolidated balance sheets and the components of accumulated other comprehensive loss related to the net periodic pension benefit costs as follows (in thousands):

	December 31,
	2012			2011
Other accrued expenses (current)	$	(373	)	$	(391	)
Other liabilities (long-term)		(38,184	)		(50,342	)
Total amount recognized as accrued pension benefit liability	$	(38,557	)	$	(50,733	)
Accumulated other comprehensive loss:
Net loss, net of tax benefit of $13,594 and $15,727 for the years ended December 31, 2012 and 2011, respectively	$	29,624		$	33,017
Pension tax liability		5,760			5,760
Accumulated other comprehensive loss related to net periodic pension benefit cost	$	35,384		$	38,777

        The total net loss of $29.6 million, which is net of tax, relates to deferred actuarial losses from changes in discount rates, differences between actual and assumed asset returns, and differences between actual and assumed demographic experience (rates of turnover, retirement rates, mortality rates and prior to the plan freeze, rates of compensation increases). During 2013, we expect to amortize net losses of $1.7 million, which are included in accumulated other comprehensive loss as of December 31, 2012.

        The following table includes other changes in plan assets and benefit obligations that were recognized in other comprehensive income (loss) (in thousands):

	December 31,
	2012		2011
Net gain (loss)	$	3,947	$	(18,503	)
Amortization of net actuarial loss		1,578		753
Total amount recognized in other comprehensive income (loss)	$	5,525	$	(17,750	)

        Components of net periodic pension benefit cost were (in thousands):

	Year Ended December 31,
	2012			2011			2010
Service cost	$	—		$	—		$	—
Interest cost		5,379			5,872			6,092
Expected return on plan assets		(6,190	)		(6,824	)		(6,446	)
Amortization of prior service cost		—			—			—
Amortization of net loss		1,579			754			376
Net periodic benefit cost	$	768		$	(198	)	$	22

        Our expected future pension benefit payments for the next 10 years are as follows (in thousands):

For Years Ended December 31,	Expected Future Pension Benefit Payments
2013	$	5,551
2014		5,630
2015		5,849
2016		5,991
2017		6,001
2018 through 2022		36,961

        Weighted-average assumptions used to estimate our pension benefit obligations and to determine our net periodic pension benefit cost are as follows:

	Year Ended December 31,
	2012	2011	2010
Discount rate used to estimate our pension benefit obligation	3.60%-4.00%	3.90%-4.20%		5.25	%
Discount rate used to determine net periodic pension benefit	3.90%-4.20%	5.25%		5.75	%
Rate of compensation increase	N/A	N/A		N/A
Expected long-term rate-of-return on plan assets	7.00%	7.00%		8.00	%

        For the discount rate for the years ended December 31, 2012 and 2011, we used a custom bond modeler that develops a hypothetical portfolio of high quality corporate bonds, rated AA- and above by Standard & Poor's, that could be purchased to settle the obligations of the plan. The yield on this hypothetical portfolio represents a reasonable rate to value our plan liability. Prior to 2011, we used the Citigroup Pension Discount Curve to aid in the selection of our discount rate, which we believe reflects the weighted rate of a theoretical high quality bond portfolio consistent with the duration of the cash flows related to our pension liability.

        We considered the current levels of expected returns on a risk-free investment, the historical levels of risk premium associated with each of our pension asset classes, the expected future returns for each of our pension asset classes and then weighted each asset class based on our pension plan asset allocation to derive an expected long-term return on pension plan assets. During the years ended December 31, 2012, 2011 and 2010, our actual rate of return on plan assets was 15.4%, 4.04% and 12.3%.

        Our investment objective is to achieve a consistent total rate-of-return that will equal or exceed our actuarial assumptions and to equal or exceed the benchmarks that we use for each of our pension plan asset classes. The following asset allocation is designed to create a diversified portfolio of pension plan assets that is consistent with our target asset allocation and risk policy:

	Target Allocation			Percentage of Plan Assets as of December 31,
Asset Category	2012			2012			2011
Equity securities		60	%		55	%		60	%
Debt securities		40	%		45	%		40	%
		100	%		100	%		100	%

        The following table summarizes our pension plan assets measured at fair value using the prescribed three-level fair value hierarchy as of December 31, 2012 and 2011 (in thousands):

	Significant Observable Inputs
	(Level 2)		Total
December 31, 2012:
Money market fund	$	1,092	$	1,092
Commingled pools:
U.S. equity		30,034		30,034
International equity		15,241		15,241
REIT		3,875		3,875
High yield bond		2,916		2,916
Emerging markets		6,374		6,374
Investment grade fixed income		36,880		36,880
Total	$	96,412	$	96,412
December 31, 2011:
Money market fund	$	462	$	462
Commingled pools:
U.S. equity		26,573		26,573
International equity		9,757		9,757
REIT		3,390		3,390
High yield bond		2,914		2,914
Emerging markets		6,652		6,652
Investment grade fixed income		32,566		32,566
Total	$	82,314	$	82,314

        The commingled pools, U.S. and International stock funds and U.S. bond funds consist of various funds that are valued at the net asset value of units held by the plan at year-end as determined by the custodian, based on fair value of the underlying securities. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, while we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in different fair value measurement as of the reporting date.