Entergy 2003 Annual Report Download - page 81

79
ENTERGY CORPORATION AND SUBSIDIARIES 2003
COMPONENTS OF NET PENSION COST
Total 2003, 2002, and 2001, pension costs of Entergy
Corporation and its subsidiaries, including amounts capital-
ized, included the following components (in thousands):
2003 2002 2001
Service cost - benefits
earned during the period $ 70,337 $ 56,947 $ 49,166
Interest cost on projected
benefit obligation 134,403 128,387 118,448
Expected return on assets (155,460) (158,202) (157,889)
Amortization of transition asset (763) (763) (7,142)
Amortization of prior service cost 5,886 5,993 5,735
Recognized net (gain)/loss 6,399 5,504 (6,573)
Curtailment loss 14,864 – –
Special termination benefits 32,006 – –
Net pension costs $ 107,672 $ 37,866 $ 1,745
PENSION OBLIGATIONS, PLAN ASSETS, FUNDED
STATUS, AMOUNTS NOT YET RECOGNIZED AND
RECOGNIZED IN THE BALANCE SHEET AS OF
DECEMBER 31, 2003 AND 2002 (IN THOUSANDS):
2003 2002
Change in Projected Benefit
Obligation (PBO)
Balance at beginning of year $1,992,207 $1,720,492
Service cost 70,337 56,947
Interest cost 134,403 128,387
Amendments 227 –
Curtailments 10,951 –
Special termination benefits 32,006 –
Actuarial loss 207,008 144,531
Benefits paid (97,574) (91,548)
Acquisition of subsidiary – 33,398
Balance at end of year $2,349,565 $1,992,207
Change in Plan Assets
Fair value of assets at
beginning of year $1,451,802 $1,686,836
Actual return on plan assets 355,043 (191,136)
Employer contributions 34,645 12,857
Employee contributions 1,059 1,125
Acquisition of subsidiary – 33,668
Benefits paid (97,574) (91,548)
Fair value of assets
at end of year $1,744,975 $1,451,802
Funded status $ (604,590) $ (540,405)
Amounts not yet recognized
in the balance sheet:
Unrecognized transition asset (1,426) (2,189)
Unrecognized prior service cost 30,467 37,351
Unrecognized net (gain)/loss 410,321 413,043
Accrued pension cost recognized
in the balance sheet $ (165,228) $ (92,200)
Amounts recognized in
the balance sheet:
Accrued pension cost $ (165,228) $ (92,200)
Additional minimum
pension liability (180,212) (208,151)
Intangible asset 30,832 33,346
Accumulated other
comprehensive income 15,359 17,016
Regulatory asset 134,021 157,789
Net amount recognized $ (165,228) $ (92,200)
Other Postretirement Benefits
Entergy also provides health care and life insurance
benefits for retired employees. Substantially all domestic
employees may become eligible for these benefits if they
reach retirement age while still working for Entergy.
Entergy uses a December 31 measurement date for its
postretirement benefit plans.
Effective January 1, 1993, Entergy adopted SFAS 106,
which required a change from a cash method to an accrual
method of accounting for postretirement benefits other
than pensions. At January 1, 1993, the actuarially determined
accumulated postretirement benefit obligation (APBO)
earned by retirees and active employees was estimated to be
approximately $241.4 million for Entergy (other than
Entergy Gulf States) and $128 million for Entergy Gulf
States. Such obligations are being amortized over a 20-year
period that began in 1993. For the most part, the domestic
utilities and System Energy recover SFAS 106 costs from
customers and are required to fund postretirement benefits
collected in rates to an external trust.
COMPONENTS OF NET POSTRETIREMENT
BENEFIT COST
Total 2003, 2002, and 2001 other postretirement benefit
costs of Entergy Corporation and its subsidiaries, including
amounts capitalized and deferred, included the following
components (in thousands):
2003 2002 2001
Service cost - benefits earned
during the period $ 37,799 $ 29,199 $ 24,225
Interest cost on APBO 52,746 44,819 38,811
Expected return on assets (15,810) (14,066) (12,578)
Amortization of
transition obligation 15,193 17,874 17,874
Amortization of
prior service cost (925) 992 992
Recognized net (gain)/loss 12,369 1,874 (1,506)
Curtailment loss 57,958 – –
Special termination benefits 5,444 – –
Net postretirement benefit cost $164,774 $ 80,692 $ 67,818