Xcel Energy 2004 Annual Report Download - page 67

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
Xcel Energy Annual Report 2004
65
Benefit Obligations A comparison of the actuarially computed pension-benefit obligation and plan assets, on a combined basis, is presented in the
following table:
(Thousands of dollars) 2004 2003
Accumulated Benefit Obligation at Dec. 31 $2,575,317 $2,512,138
Change in Projected Benefit Obligation
Obligation at Jan. 1 $2,632,491 $2,505,576
Service cost 58,150 67,449
Interest cost 165,361 170,731
Plan amendments –85,937
Actuarial loss 133,552 82,197
Settlements (27,627) (9,546)
Curtailment gain –(26,407)
Benefit payments (229,664) (243,446)
Obligation at Dec. 31 $2,732,263 $2,632,491
Change in Fair Value of Plan Assets
Fair value of plan assets at Jan. 1 $3,024,661 $2,639,963
Actual return on plan assets 284,600 605,978
Employer contributions 10,046 31,712
Settlements (27,627) (9,546)
Benefit payments (229,664) (243,446)
Fair value of plan assets at Dec. 31 $3,062,016 $3,024,661
Funded Status of Plans at Dec. 31
Net asset $ 329,753 $ 392,170
Unrecognized transition asset –(7)
Unrecognized prior service cost 244,437 273,725
Unrecognized loss 176,957 9,710
Net pension amounts recognized on Consolidated Balance Sheets $ 751,147 $ 675,598
Prepaid pension asset recorded (a) $ 642,873 $ 566,568
Intangible asset recorded – prior service costs 4,594 5,724
Minimum pension liability recorded (62,669) (54,647)
Accumulated other comprehensive income recorded – pretax 170,554 158,083
Accumulated other comprehensive income recorded – net of tax 106,007 98,072
Measurement Date Dec. 31, 2004 Dec. 31, 2003
Significant Assumptions Used to Measure Benefit Obligations
Discount rate for year-end valuation 6.00% 6.25%
Expected average long-term increase in compensation level 3.50% 3.50%
(a) $18.5 million of the 2004 prepaid pension asset and $18.7 million of the 2003 prepaid pension asset relates to Xcel Energy’s remaining obligation for companies that are now
classified as discontinued operations.
During 2002, one of Xcel Energy’s pension plans became underfunded, and at Dec. 31, 2004, had projected benefit obligations of $694.4 million, which
exceeded plan assets of $590.1 million. All other Xcel Energy plans in the aggregate had plan assets of $2.5 billion and projected benefit obligations of
$2.0 billion on Dec. 31, 2004. A minimum pension liability of $62.7 million was recorded related to the underfunded plan as of that date. A corresponding
reduction in Accumulated Other Comprehensive Income, a component of Stockholders’ Equity, also was recorded, as previously recorded prepaid
pension assets were reduced to record the minimum liability. Net of the related deferred income tax effects of the adjustments, total Stockholders’ Equity
was reduced by $106.0 million at Dec. 31, 2004, due to the minimum pension liability for the underfunded plan.
Cash Flows Cash funding requirements can be impacted by changes to actuarial assumptions, actual asset levels and other pertinent calculations prescribed
by the funding requirements of income tax and other pension-related regulations. These regulations did not require cash funding in the years 2002
through 2004 for Xcel Energy’s pension plans, and is not expected to require cash funding in 2005. PSCo elected to make voluntary contributions to its
pension plan for bargaining employees of $30 million in 2003 and $9 million in 2004, and Cheyenne voluntarily contributed $1 million to its pension
plan for bargaining employees in 2004.