Alaska Airlines and Horizon Air 2010 Annual Report Download - page 190

Of the total $1.3 billion PBO for the qualified
plans, approximately 57% represents the
obligation of the plan covering Alaska’s pilots.
The accumulated benefit obligation for the
combined qualified defined-benefit pension plans
was $1,232.1 million and $1,102.5 million at
December 31, 2010 and 2009, respectively. The
accumulated benefit obligation for the
nonqualified defined-benefit plan was $40.4
million and $36.9 million at December 31, 2010
and 2009, respectively.
The plan amendment and the transfer to the pilot
long-term disability plan in 2009 were the result
of plan changes in the new pilot collective
bargaining agreement ratified during the
year. See further discussion under “Pilot Long-
term Disability Benefits” below.
As of December 31, 2010 and 2009, the amounts recognized in the consolidated balance sheets were
as follows (in millions):
2010 2009
Qualified Nonqualified Qualified Nonqualified
Accrued benefit liability-current ...................... $ — $ 2.3 $ — $ 2.5
Accrued benefit liability-long term .................... 200.3 38.8 272.9 34.8
Total liability recognized ........................... $200.3 $41.1 $272.9 $37.3
AMOUNTS NOT YET REFLECTED IN NET PERIODIC BENEFIT COST AND INCLUDED IN ACCUMULATED
OTHER COMPREHENSIVE INCOME OR LOSS (AOCI):
2010 2009
Qualified Nonqualified Qualified Nonqualified
Prior service cost (credit) .......................... $ (16.7) $0.1 $ (17.5) $0.1
Net loss ........................................ 417.0 8.7 395.0 4.8
Amount recognized in AOCI (pretax) .................. $400.3 $8.8 $377.5 $4.9
The expected amortization of prior service credit
and net loss from AOCI in 2011 is $1.0 million
and $24.3 million, respectively, for the qualified
defined-benefit pension plans. For the
nonqualified defined-benefit pension plans, the
expected combined amortization of prior service
cost and net loss from AOCI in 2011 is $0.5
million.
Net pension expense for the defined-benefit plans included the following components for 2010, 2009,
and 2008 (in millions):
Qualified Nonqualified
2010 2009 2008 2010 2009 2008
Service cost ............................... $ 32.3 $ 44.2 $ 46.6 $0.8 $0.7 $0.9
Interest cost ............................... 67.7 66.9 62.7 2.1 2.2 2.1
Expected return on assets .................... (70.9) (51.3) (71.8) ———
Amortization of prior service cost ............... (0.9) 4.3 4.4 0.1 0.1 0.1
Curtailment loss ............................ —— 0.5 ———
Recognized actuarial loss .................... 22.0 28.9 5.6 0.1 0.1 0.2
Net pension expense ........................ $ 50.2 $ 93.0 $ 48.0 $3.1 $3.1 $3.3
Historically, the Company’s practice has been to
contribute to the qualified defined-benefit
pension plans in an amount equal to the greater
of 1) the minimum required by law, 2) the
Pension Protection Act (PPA) target liability, or 3)
the service cost as actuarially calculated. There
are no current funding requirements for the
Company’s plans in 2011. However, the
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