Atmos Energy 1997 Annual Report Download - page 41

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36 ATMOS ENERGY CORPORATION
TEN Employee retirement and stock ownership plans
At September 30, 1997, the Company had four defined benefit pension plans, covering
the Western Kentucky Division employees, the Greeley Gas Division employees, and the
United Cities Division employees, while the fourth covers all other Atmos employees. The
plans provide essentially the same benefits to all employees. Except for the United Cities
Division, the plans’ benefits are based on years of service and the employee’s compensa-
tion during the highest paid five consecutive calendar years within the last 10 years of
employment. The United Cities Division plan provides benefits based on years of service
and final average salary. The Company’s funding policy is to contribute annually an
amount in accordance with the requirements of the Employee Retirement Income Security
Act of 1974. Contributions are intended to provide not only for benefits attributed to ser-
vice to date but also for those expected to be earned in the future.
The following table sets forth the Atmos plan’s funded status at September 30, 1997 and 1996:
(In thousands) 1997 1996
____________________________________________ ______________________________________________
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $75,027 and $77,089 in 1997
and 1996, respectively.................................................................. $ (78,591) $ (77,513)
____________________________________________ ______________________________________________
____________________________________________ ______________________________________________
Projected benefit obligation............................................................. $ (87,999) $ (86,571)
Plan assets at fair value..................................................................... 102,865 90,157
____________________________________________ ______________________________________________
Funded status.................................................................................... 14,866 3,586
Unrecognized net asset being
recognized over 15 years.............................................................. -(198)
Unrecognized prior service cost....................................................... (1,217) (1,359)
Unrecognized net (gain) loss ............................................................ (15,273) (3,086)
____________________________________________ ______________________________________________
Accrued pension cost ....................................................................... $ (1,624) $ (1,057)
____________________________________________ ______________________________________________
____________________________________________ ______________________________________________
Net periodic pension cost for the Atmos plan for 1997, 1996 and 1995 included the fol-
lowing components:
(In thousands) 1997 1996 1995
____________________________________________ ___________________________________________ _____________________________________________
Service cost....................................................................... $ 2,263 $ 2,235 $ 1,862
Interest cost on projected benefit obligation ................. 6,356 6,434 6,060
Actual return on plan assets ............................................ (16,588) (11,342) (12,200)
Net amortization and deferral ......................................... 8,322 3,298 5,007
____________________________________________ ___________________________________________ _____________________________________________
Net periodic pension cost................................................ $ 353 $ 625 $ 729
____________________________________________ ___________________________________________ _____________________________________________
____________________________________________ ___________________________________________ _____________________________________________
The following table sets forth the Western Kentucky Division plan’s funded status at
September 30, 1997 and 1996:
(In thousands) 1997 1996
___________________________________________ ____________________________________________
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $31,877 and $30,984 in 1997
and 1996, respectively................................................................... $(32,752) $(30,983)
___________________________________________ ____________________________________________
___________________________________________ ____________________________________________
Projected benefit obligation.............................................................. $(36,293) $(35,673)
Plan assets at fair value ..................................................................... 53,289 46,478
___________________________________________ ____________________________________________
Funded status .................................................................................... 16,996 10,805
Unrecognized prior service cost........................................................ 3,976 4,829
Unrecognized net (gain) loss ............................................................. (10,065) (4,361)
___________________________________________ ____________________________________________
Prepaid pension cost ............................................................................. $ 10,907 $ 11,273
___________________________________________ ____________________________________________
___________________________________________ ____________________________________________
Net periodic pension cost for 1997, 1996 and 1995 included the following components:
(In thousands) 1997 1996 1995
____________________________________________ ___________________________________________ _____________________________________________
Service cost ...................................................................... $ 734 $ 672 $ 706
Interest cost...................................................................... 2,619 2,431 2,306
Actual return on plan assets ............................................ (8,456) (5,771) (6,355)
Net amortization and deferral ......................................... 5,081 2,356 3,399
____________________________________________ ___________________________________________ _____________________________________________
Net periodic pension cost (benefit)................................. $ (22) $ (312) $ 56
______________________________________ _____________________________________ _____________________________________________
______________________________________ _____________________________________ _____________________________________________
The weighted-average discount rates used in determining the actuarial present value of the
projected benefit obligations of the Atmos and Western Kentucky Division retirement
plans was 7.5% at June 30, 1997 and 1996. The rate of increase in future compensation
levels reflected in such determination was 4.0% for the years ended September 30, 1997
and 1996. The expected long-term rate of return on plan assets was 9.0%, 9.5% and
10.0% for the years ended September 30, 1997, 1996 and 1995, respectively. The plan
assets consist primarily of investments in common stocks, interest bearing securities and
interests in commingled pension trust funds. Prepaid pension cost is included in deferred
charges and other assets.
The following table sets forth the Greeley Gas Division plan’s funded status at September
30, 1997 and 1996:
(In thousands) 1997 1996
___________________________________________ ____________________________________________
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $15,361 and $15,110 in 1997
and 1996, respectively................................................................... $(16,033) $(15,252)
___________________________________________ ____________________________________________
___________________________________________ ____________________________________________
Projected benefit obligation.............................................................. $(17,700) $(17,666)
Plan assets at fair value ..................................................................... 17,535 16,086
___________________________________________ ____________________________________________
Funded status .................................................................................... (165) (1,580)
Unrecognized net asset being recognized over 15 years ................ (1,231) (1,521)
Unrecognized prior service cost........................................................ 1,344 1,480
Unrecognized net (gain) loss ............................................................. (372) 1,375
___________________________________________ ____________________________________________
Accrued pension cost ........................................................................ $ (424) $ (246)
___________________________________________ ____________________________________________
___________________________________________ ____________________________________________