v2.4.0.6
Pension Liabilities
 12 Months Ended
Dec. 31, 2011
Pension Liabilities [Abstract]  
Pension Liabilities

Note 18 – Pension Liabilities

Supplemental Executive Retirement Plan

     In March 2007, the Board of Directors of Reading International, Inc. ("Reading") approved a Supplemental Executive Retirement Plan ("SERP") pursuant to which Reading has agreed to provide James J. Cotter, its Chief Executive Officer and Chairman of the Board of Directors, supplemental retirement benefits effective March 1, 2007. Under the SERP, Mr. Cotter will receive a monthly payment of the greater of (i) 40% of the average monthly earnings over the highest consecutive 36-month period of earnings prior to Mr. Cotter's separation from service with Reading or (ii) $25,000 per month for the remainder of his life, with a guarantee of 180 monthly payments following his separation from service with Reading or following his death. The beneficiaries under the SERP may be designated by Mr. Cotter or by his beneficiary following his or his beneficiary's death. The benefits under the SERP are fully vested as of March 1, 2007.

     The SERP initially will be unfunded, but Reading may choose to establish one or more grantor trusts from which to pay the SERP benefits. As such, the SERP benefits are unsecured, general obligations of Reading. The SERP is administered by the Compensation Committee of the Board of Directors of Reading. In accordance with FASB ASC 715-30-05 – Defined Benefit Pension Plans ("ASC 715-30-05"), the initial pension benefit obligation of $2.7 million was included in our other liabilities with a corresponding amount of unrecognized prior service cost included in accumulated other comprehensive income on March 1, 2007 (see Note 24 – Comprehensive Income (Loss)). The initial benefit obligation was based on a discount rate of 5.75% and a compensation increase rate of 3.5%. The $2.7 million is being amortized as a prior service cost over the estimated service period of 10 years combined with an annual interest cost. For the years ended December 31, 2011, 2010, and 2009, we recognized $195,000, $200,000, and $160,000, respectively, of interest cost and $304,000 of amortized prior service cost per year. For the years ended December 31, 2011 and 2010, we recognized $24,000 and $0 of amortized net gains. The balance of the other liability for this pension plan was $3.5 million and $3.8 million at December 31, 2011 and 2010, respectively, and the accumulated unrecognized prior service costs included in other comprehensive income balance was $1.2 and $2.1 million at December 31, 2011 and 2010, respectively. The December 31, 2011 and 2010 values of the SERP are based on a discount rate of 5.10% and 6.25%, respectively and an annual compensation growth rate of 3.50% per year.

     The change in the SERP pension benefit obligation and the funded status for the year ending December 31, 2011 and 2010are as follows (dollars in thousands):

 

    For the year ending  
Change in Benefit Obligation   December 31, 2011  
Benefit obligation at January 1, 2011 $ 3,820  
Interest cost   195  
Actuarial gain   (504 )
Benefit obligation at December 31, 2011   3,511  
Funded status at December 31, 2011 $ (3,511 )
 
    For the year ending  
Change in Benefit Obligation   December 31, 2010  
Benefit obligation at January 1, 2010 $ 3,428  
Interest cost   200  
Actuarial gain   192  
Benefit obligation at December 31, 2010   3,820  
Funded status at December 31, 2010 $ (3,820 )

 

Amount recognized in balance sheet consists of (dollars in thousands):

    At December 31,   At December 31,
    2011   2010
Noncurrent assets $ - $ -
Current liabilities   10   9
Noncurrent liabilities   3,501   3,811

 

Items not yet recognized as a component of net periodic pension cost consist of (dollars in thousands):

    At December 31,     At December 31,
    2011     2010
Unamortized actuarial (gain) loss $ (14 ) $ 514
Prior service costs   1,234     1,538
Accumulated other comprehensive loss $ 1,220   $ 2,052

 

     The components of the net periodic benefit cost and other amounts recognized in other comprehensive income are as follows (dollars in thousands):

 

    From January 1, 2011     From January 1, 2010  
Net periodic benefit cost   to December 31, 2011     to December 31, 2010  
Service cost $ -   $ -  
Interest cost   195     200  
Expected return on plan assets   -     -  
Amortization of prior service costs   304     304  
Amortization of net gain   24     -  
Net periodic benefit cost $ 523   $ 504  
Other changes in plan assets and benefit obligations            
recognized in other comprehensive income            
Net (gain) loss $ (504 ) $ 192  
Prior service cost   -     -  
Amortization of prior service cost   (304 )   (304 )
Amortization of net gain   (24 )   -  
Total recognized in other comprehensive income $ (832 ) $ (112 )
Total recognized in net periodic benefit cost and other            
comprehensive income $ (309 ) $ 392  

 

     The estimated net loss and prior service cost for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year will be $0 and $304,000, respectively.

     The following weighted average assumptions were used to determine the plan benefit obligations at December 31, 2011 and 2010:

  2011   2010  
Discount rate 4.25 % 5.10 %
Rate of compensation increase 3.50 % 3.50 %

 

     The following weighted-average assumptions were used to determine net periodic benefit cost for the year ended December 31, 2011 and 2010:

  2011   2010  
Discount rate 5.10 % 5.85 %
Expected long-term return on plan assets 0.00 % 0.00 %
Rate of compensation increase 3.50 % 3.50 %

 

Other Pension Liabilities

     In addition to the aforementioned SERP, Mr. S. Craig Tompkins has a vested interest in the pension plan originally established by Craig Corporation prior to its merger with our company of $195,000 and $194,000 at December 31, 2011 and 2010, respectively. The balance accrues interest at 30 day LIBOR and is maintained as an unfunded Executive Pension Plan obligation included in other liabilities. Mr. Tompkins will be paid the balance of this pension once he no longer provides services to the Company. Additionally, as part of his employment agreement, Mr. John Hunter, our Chief Operating Officer, has a vested interest in a pension plan that currently accrues $200,000 per year and had a balance of $583,000 and $392,000 at December 31, 2011 and 2010, respectively. Mr. Hunter will be paid the balance of his pension on the last day of his employment with the Company.

 

     The benefit payments for all of our pensions, which reflect expected future service, as appropriate, are expected to be paid over the following periods (dollars in thousands):

    Pension
    Payments
2012 $ 10
2013   20
2014   30
2015   40
2016   50
Thereafter   4,139
Total pension payments $ 4,289