|
NOTE 13—EMPLOYEE BENEFIT PLANS
The Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans generally covering all employees who, prior to the freeze, were age 21 or older and had completed at least 1,000 hours of service in their first twelve months of employment, or in a calendar year ending thereafter, and who were not covered by a collective bargaining agreement. The Company also offers eligible retirees the opportunity to participate in a health plan. Certain employees are eligible for subsidized postretirement medical benefits. The eligibility for these benefits is based upon a participant's age and service as of January 1, 2009. The Company also sponsors a postretirement deferred compensation plan.
On May 2, 2008, the Company's Board of Directors approved revisions to the Company's Post Retirement Medical and Life Insurance Plan effective January 1, 2009 and on July 3, 2008 the changes were communicated to the plan participants. As a result of these revisions, the Company recorded a negative prior service cost of $5,969,000 through other comprehensive income to be amortized over eleven years starting in fiscal 2010, based on expected future service of the remaining participants.
The measurement date used to determine pension and other postretirement benefits is March 29, 2012.
Net periodic benefit cost for the plans consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
52 Weeks
Ended
March 29,
2012 |
|
52 Weeks
Ended
March 31,
2011 |
|
52 Weeks
Ended
April 1,
2010 |
|
52 Weeks
Ended
March 29,
2012 |
|
52 Weeks
Ended
March 31,
2011 |
|
52 Weeks
Ended
April 1,
2010 |
|
|
Components of net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
180 |
|
$ |
180 |
|
$ |
180 |
|
$ |
149 |
|
$ |
154 |
|
$ |
210 |
|
|
Interest cost |
|
|
4,640 |
|
|
4,612 |
|
|
4,403 |
|
|
1,122 |
|
|
1,275 |
|
|
1,296 |
|
|
Expected return on plan assets |
|
|
(4,465 |
) |
|
(3,986 |
) |
|
(2,990 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Amortization of prior service credit |
|
|
— |
|
|
— |
|
|
— |
|
|
(984 |
) |
|
(865 |
) |
|
(543 |
) |
|
Amortization of net (gain) loss |
|
|
5 |
|
|
137 |
|
|
134 |
|
|
— |
|
|
— |
|
|
(278 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
360 |
|
$ |
943 |
|
$ |
1,727 |
|
$ |
287 |
|
$ |
564 |
|
$ |
685 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the changes in other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
|
Net (gain) loss |
|
$ |
15,615 |
|
$ |
773 |
|
$ |
3,324 |
|
$ |
(109 |
) |
|
Net prior service credit |
|
|
— |
|
|
— |
|
|
(1,035 |
) |
|
(283 |
) |
|
Amortization of net gain (loss) |
|
|
(5 |
) |
|
(137 |
) |
|
— |
|
|
— |
|
|
Amortization of prior service credit |
|
|
— |
|
|
— |
|
|
984 |
|
|
865 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total recognized in other comprehensive loss |
|
$ |
15,610 |
|
$ |
636 |
|
$ |
3,273 |
|
$ |
473 |
|
|
Net periodic benefit cost |
|
|
360 |
|
|
943 |
|
|
287 |
|
|
564 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total recognized in net periodic benefit cost and other comprehensive loss |
|
$ |
15,970 |
|
$ |
1,579 |
|
$ |
3,560 |
|
$ |
1,037 |
|
| |
|
|
|
|
|
|
|
|
|
The following tables set forth the plan's change in benefit obligations and plan assets and the accrued liability for benefit costs included in the Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
|
Change in benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of period |
|
$ |
80,350 |
|
$ |
76,441 |
|
$ |
21,916 |
|
$ |
21,984 |
|
|
Service cost |
|
|
180 |
|
|
180 |
|
|
149 |
|
|
154 |
|
|
Interest cost |
|
|
4,640 |
|
|
4,612 |
|
|
1,122 |
|
|
1,275 |
|
|
Plan participant's contributions |
|
|
— |
|
|
— |
|
|
517 |
|
|
469 |
|
|
Actuarial (gain) loss |
|
|
14,162 |
|
|
3,271 |
|
|
3,325 |
|
|
(108 |
) |
|
Plan amendment |
|
|
— |
|
|
— |
|
|
(1,035 |
) |
|
(288 |
) |
|
Benefits paid |
|
|
(2,660 |
) |
|
(4,154 |
) |
|
(1,456 |
) |
|
(1,570 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Benefit obligation at end of period |
|
$ |
96,672 |
|
$ |
80,350 |
|
$ |
24,538 |
|
$ |
21,916 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
52 Weeks
Ended
March 29, 2012 |
|
52 Weeks
Ended
March 31, 2011 |
|
|
Change in plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of period |
|
$ |
59,776 |
|
$ |
54,457 |
|
$ |
— |
|
$ |
— |
|
|
Actual return on plan assets gain |
|
|
3,011 |
|
|
6,446 |
|
|
— |
|
|
— |
|
|
Employer contribution |
|
|
4,109 |
|
|
3,027 |
|
|
939 |
|
|
1,101 |
|
|
Plan participant's contributions |
|
|
— |
|
|
— |
|
|
517 |
|
|
469 |
|
|
Benefits paid |
|
|
(2,660 |
) |
|
(4,154 |
) |
|
(1,456 |
) |
|
(1,570 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at end of period |
|
$ |
64,236 |
|
$ |
59,776 |
|
$ |
— |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
Net liability for benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funded status |
|
$ |
(32,436 |
) |
$ |
(20,574 |
) |
$ |
(24,538 |
) |
$ |
(21,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
March 29, 2012 |
|
March 31, 2011 |
|
March 29, 2012 |
|
March 31, 2011 |
|
|
Amounts recognized in the Balance Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities |
|
$ |
(155 |
) |
$ |
(208 |
) |
$ |
(1,062 |
) |
$ |
(1,084 |
) |
|
Other long-term liabilities |
|
|
(32,281 |
) |
|
(20,366 |
) |
|
(23,476 |
) |
|
(20,832 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Net liability recognized |
|
$ |
(32,436 |
) |
$ |
(20,574 |
) |
$ |
(24,538 |
) |
$ |
(21,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Aggregate accumulated benefit obligation |
|
$ |
(96,672 |
) |
$ |
(80,350 |
) |
$ |
(24,538 |
) |
$ |
(21,916 |
) |
| |
|
|
|
|
|
|
|
|
|
The following table summarizes pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets:
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
|
(In thousands) |
|
March 29, 2012 |
|
March 31, 2011 |
|
|
Aggregated accumulated benefit obligation |
|
$ |
(96,672 |
) |
$ |
(80,350 |
) |
|
Aggregated projected benefit obligation |
|
|
(96,672 |
) |
|
(80,350 |
) |
|
Aggregated fair value of plan assets |
|
|
64,236 |
|
|
59,776 |
|
Amounts recognized in accumulated other comprehensive income consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
(In thousands) |
|
March 29, 2012 |
|
March 31, 2011 |
|
March 29, 2012 |
|
March 31, 2011 |
|
|
Net actuarial loss |
|
$ |
21,639 |
|
$ |
6,029 |
|
$ |
4,823 |
|
$ |
1,498 |
|
|
Prior service credit |
|
|
— |
|
|
— |
|
|
(8,216 |
) |
|
(8,164 |
) |
Amounts in accumulated other comprehensive loss expected to be recognized in components of net periodic pension cost in fiscal 2013 are as follows:
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Pension Benefits |
|
Other Benefits |
|
|
Net actuarial loss |
|
$ |
2,125 |
|
$ |
202 |
|
|
Prior service credit |
|
|
— |
|
|
(984 |
) |
| |
|
|
|
|
|
|
Total |
|
$ |
2,125 |
|
$ |
(782 |
) |
| |
|
|
|
|
|
Actuarial Assumptions
The weighted-average assumptions used to determine benefit obligations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
|
March 29,
2012 |
|
March 31,
2011 |
|
March 29,
2012 |
|
March 31,
2011 |
|
|
Discount rate |
|
|
4.86 |
% |
|
5.86 |
% |
|
4.42 |
% |
|
5.51 |
% |
|
Rate of compensation increase |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
The weighted-average assumptions used to determine net periodic benefit cost are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
|
|
|
52 Weeks
Ended
March 29,
2012 |
|
52 Weeks
ended
March 31,
2011 |
|
52 Weeks
ended
April 1,
2010 |
|
52 Weeks
Ended
March 29,
2012 |
|
52 Weeks
ended
March 31,
2011 |
|
52 Weeks
ended
April 1,
2010 |
|
|
Discount rate |
|
|
5.86 |
% |
|
6.16 |
% |
|
7.43 |
% |
|
5.51 |
% |
|
5.97 |
% |
|
7.42 |
% |
|
Expected long-term return on plan assets |
|
|
8.00 |
% |
|
8.00 |
% |
|
8.00 |
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
Rate of compensation increase |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
In developing the expected long-term rate of return on plan assets at each measurement date, the Company considers the plan assets' historical returns, asset allocations, and the anticipated future economic environment and long-term performance of the asset classes. While appropriate consideration is given to recent and historical investment performance, the assumption represents management's best estimate of the long-term prospective return.
For measurement purposes, the annual rate of increase in the per capita cost of covered health care benefits assumed for 2012 was 8.5% for medical. The rates were assumed to decrease gradually to 5.0% for medical in 2019. The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of March 29, 2012 by $2,543,000 and the aggregate of the service and interest cost components of postretirement expense for fiscal 2013 by $116,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the accumulated postretirement obligation for fiscal 2013 by $2,151,000 and the aggregate service and interest cost components of postretirement expense for fiscal 2013 by $99,000. The Company's retiree health plan provides a benefit to its retirees that is at least actuarially equivalent to the benefit provided by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("Medicare Part D").
Cash Flows
The Company expects to contribute $3,554,000 to the pension plans during fiscal 2013.
The following table provides the benefits expected to be paid (inclusive of benefits attributable to estimated future employee service) in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter:
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Pension Benefits |
|
Other Benefits
Net of Medicare
Part D
Adjustments |
|
Medicare Part D
Adjustments |
|
|
2013 |
|
$ |
2,538 |
|
$ |
1,031 |
|
$ |
82 |
|
|
2014 |
|
|
2,853 |
|
|
1,083 |
|
|
93 |
|
|
2015 |
|
|
2,359 |
|
|
1,122 |
|
|
105 |
|
|
2016 |
|
|
3,049 |
|
|
1,178 |
|
|
113 |
|
|
2017 |
|
|
3,911 |
|
|
1,239 |
|
|
122 |
|
|
Years 2018 - 2022 |
|
|
22,458 |
|
|
6,803 |
|
|
791 |
|
Pension Plan Assets
The Company's investment objectives for its defined benefit pension plan investments are: (1) to preserve the real value of its principal; (2) to maximize a real long-term return with respect to the plan assets consistent with minimizing risk; (3) to achieve and maintain adequate asset coverage for accrued benefits under the plan; and (4) to maintain sufficient liquidity for payment of the plan obligations and expenses. The Company uses a diversified allocation of equity, debt, commodity and real estate exposures that are customized to the Plan's cash flow benefit needs. The target allocations for plan assets are as follows:
|
|
|
|
|
|
Asset Category |
|
Target
Allocation |
|
|
Fixed(1) |
|
|
26 |
% |
|
High yield fund |
|
|
4 |
% |
|
Equity Securities—U.S. |
|
|
31 |
% |
|
Equity Securities—International |
|
|
15 |
% |
|
Collective trust fund |
|
|
10 |
% |
|
Private Real Estate |
|
|
7 |
% |
|
Public REITs |
|
|
2 |
% |
|
Commodities broad basket |
|
|
5 |
% |
| |
|
|
|
|
|
|
|
100 |
% |
| |
|
|
|
- (1)
- Includes U.S. Treasury Securities and Bond market fund
Valuation Techniques. The fair values classified within Level 1 of the valuation hierarchy were determined using quoted market prices from actively traded markets. Pooled separate accounts and collective trust funds were classified within Level 2 hierarchy, which were not publicly quoted, as the underlying assets have observable Level 1 quoted pricing inputs which were used in determining the fair value of these investments.
The fair value of the pension plan assets at March 29, 2012, by asset class are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 29, 2012 Using |
|
|
(In thousands) |
|
Total Carrying
Value at
March 29, 2012 |
|
Quoted prices in
active market
(Level 1) |
|
Significant other
observable inputs
(Level 2) |
|
Significant
unobservable inputs
(Level 3) |
|
|
Cash and cash equivalents |
|
$ |
15 |
|
$ |
15 |
|
$ |
— |
|
$ |
— |
|
|
U.S. Treasury Securities |
|
|
2,413 |
|
|
2,413 |
|
|
— |
|
|
— |
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. companies |
|
|
20,060 |
|
|
2,789 |
|
|
17,271 |
|
|
— |
|
|
International companies |
|
|
10,169 |
|
|
10,157 |
|
|
12 |
|
|
— |
|
|
Public REITs |
|
|
1,416 |
|
|
— |
|
|
1,416 |
|
|
|
|
|
Bond market fund |
|
|
13,345 |
|
|
13,345 |
|
|
— |
|
|
— |
|
|
Collective trust fund |
|
|
6,510 |
|
|
— |
|
|
6,510 |
|
|
— |
|
|
Commodities broad basket fund |
|
|
3,090 |
|
|
3,090 |
|
|
— |
|
|
— |
|
|
High yield bond fund |
|
|
2,843 |
|
|
— |
|
|
2,843 |
|
|
— |
|
|
Private real estate |
|
|
4,375 |
|
|
— |
|
|
4,375 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
Total assets at fair value |
|
$ |
64,236 |
|
$ |
31,809 |
|
$ |
32,427 |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
The fair value of the pension plan assets at March 31, 2011, by asset class are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2011 Using |
|
|
(In thousands) |
|
Total Carrying
Value at
March 31, 2011 |
|
Quoted prices in
active market
(Level 1) |
|
Significant other
observable inputs
(Level 2) |
|
Significant
unobservable inputs
(Level 3) |
|
|
Cash and cash equivalents |
|
$ |
32 |
|
$ |
32 |
|
$ |
— |
|
$ |
— |
|
|
U.S. Treasury Securities |
|
|
2,601 |
|
|
2,601 |
|
|
— |
|
|
— |
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. companies |
|
|
19,149 |
|
|
2,880 |
|
|
16,269 |
|
|
— |
|
|
International companies |
|
|
9,648 |
|
|
9,648 |
|
|
— |
|
|
— |
|
|
Bond market fund |
|
|
12,288 |
|
|
12,288 |
|
|
— |
|
|
— |
|
|
Collective trust fund |
|
|
5,817 |
|
|
— |
|
|
5,817 |
|
|
— |
|
|
Commodities broad basket fund |
|
|
3,608 |
|
|
3,608 |
|
|
— |
|
|
— |
|
|
High yield bond fund |
|
|
2,733 |
|
|
— |
|
|
2,733 |
|
|
— |
|
|
Real estate(1) |
|
|
3,900 |
|
|
— |
|
|
3,900 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
Total assets at fair value |
|
$ |
59,776 |
|
$ |
31,057 |
|
$ |
28,719 |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
- (1)
- This pooled separate account invests mainly in commercial real estate and includes mortgage loans which are backed by the associated properties. These real estate investments had a temporary withdrawal limitation related to past turmoil in the credit markets that resulted in a slowdown in the sale of commercial real estate assets. The temporary withdrawal limitation restriction ended March 25, 2011, and therefore the assets were transferred out of Level 3 pricing inputs and into Level 2 pricing inputs.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|
|
|
|
|
(In thousands) |
|
Real Estate |
|
|
Balance at April 1, 2010 |
|
$ |
1,819 |
|
|
Purchases |
|
|
1,593 |
|
|
Unrealized loss relating to instruments still held at end of year |
|
|
482 |
|
|
Transfers out of Level 3 |
|
|
(3,894 |
) |
| |
|
|
|
|
Balance at March 31, 2011 and March 29, 2012 |
|
|
— |
|
| |
|
|
|
Defined Contribution Plan
The Company sponsors a voluntary 401(k) savings plan covering certain employees age 21 or older and who are not covered by a collective bargaining agreement. Effective January 1, 2011, under the Company's 401(k) Savings Plan, the Company began to match 100% of each eligible employee's elective contributions up to 3% and 50% of contributions up to 5% of the employee's eligible compensation. During fiscal 2010 and the first three quarters of fiscal 2011, the Company matched 50% of each eligible employee's elective contributions up to 6% of the employee's eligible compensation. The Company's expense under the 401(k) savings plan was $2,676,000, $1,650,000, and $1,654,000 for the periods ended March 29, 2012, March 31, 2011, and April 1, 2010, respectively.
Union-Sponsored Plans
Certain theatre employees are covered by union-sponsored pension and health and welfare plans. Company contributions into these plans are determined in accordance with provisions of negotiated labor contracts. Contributions aggregated $261,000, $380,000, and $501,000, for the periods ended March 29, 2012, March 31, 2011 and April 1, 2010, respectively.
In the third quarter of fiscal 2009, the Company received notice of a written demand for payment of a partial withdrawal liability assessment from a collectively bargained multiemployer pension plan that covers certain of its unionized theatre employees. Based on a payment schedule that the Company received from this plan, the Company began making quarterly payments on January 1, 2009 related to the $5,279,000 in partial withdrawal liability. In the second quarter of fiscal 2010, the Company made a complete withdrawal from the plan which triggered an additional liability of $1,422,000 which was assessed by the plan on April 19, 2010.
During fiscal 2011, the Company recorded an estimated withdrawal liability of $3,040,000 related to three multiemployer pension plans where it had ceased making contributions. The plans have not yet delivered an assessment of the withdrawal liability to the Company.
During fiscal 2012, the Company received the final assessment of the withdrawal liability from two multiemployer pension plans where it had ceased making contributions and reduced its withdrawal liability by $267,000.
As of March 29, 2012, the Company's liability related to these collectively bargained multiemployer pension plan withdrawals, net of payments, is $2,622,000. The Company estimates its potential complete withdrawal liability from its other multiemployer pension plans is immaterial. |