Alaska Airlines and Horizon Air 2014 Annual Report Download - page 171
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During 2014, the Company made changes to the postretirement medical benefits for non-union
personnel and certain labor groups to sunset the postretirement medical benefits beginning in 2015. As
a result of these changes, the Company recognized a partial curtailment gain of $25 million during
December 31, 2014. The curtailment gain included $5 million associated with an embedded sick leave
subsidy. This subsidy was used to establish a new compensated absence liability. The net impact of
the curtailment gain of $20 million is included in special items in the income statement.
(in millions) 2014 2013
Accumulated postretirement benefit obligation
Beginning of year $89$ 117
Service cost 35
Interest cost 44
Curtailment gain (25) –
Actuarial loss (gain) 12 (35)
Benefits paid (2) (2)
End of year $81$89
Plan assets at fair value
Beginning of year $–$–
Employer contributions 22
Benefits paid (2) (2)
End of year $–$–
Funded status (unfunded) $ (81) $ (89)
The amounts recognized in the consolidated balance sheets (in millions):
2014 2013
Accrued benefit liability-current $4$3
Accrued benefit liability-long term 77 86
Total liability recognized $81$89
AMOUNTS NOT YET REFLECTED IN NET PERIODIC BENEFIT COST AND INCLUDED IN AOCL:
(in millions) 2014 2013
Prior service cost $–$1
Net gain (32) (48)
Amount recognized in AOCL (pretax) $ (32) $ (47)
87
ŠForm 10-K