Entergy 2006 Annual Report Download - page 100

ENTERGY CORPORATION AND SUBSIDIARIES 2
2000066
84
QUALIFIED PENSION OBLIGATIONS,PLAN ASSETS,FUNDED STATUS,
AMOUNTS NOT YET RECOGNIZED AND RECOGNIZED IN THE BALANCE
SHEET FOR ENTERGY CORPORATION AND ITS SUBSIDIARIES AS OF
DECEMBER 31, 2006 AND 2005 (IN THOUSANDS):
2006 2005
Change in Projected Benefit Obligation (PBO)
Balance at beginning of year $2,894,008 $ 2,555,086
Service cost 92,706 82,520
Interest cost 167,257 155,477
Amendments – 6,467
Actuarial loss 4,372 211,194
Employee contributions 1,003 1,032
Benefits paid (123,272) (117,768)
Balance at end of year $3,036,074 $ 2,894,008
Change in Plan Assets
Fair value of assets at beginning of year $1,994,879 $ 1,841,929
Actual return on plan assets 270,976 137,885
Employer contributions 318,470 131,801
Employee contributions 1,003 1,032
Benefits paid (123,272) (117,768)
Fair value of assets at end of year $2,462,056 $ 1,994,879
Funded status $(574,018) $ (899,129)
Amounts not yet recognized in the balance sheet
(before application of SFAS 158)
Unrecognized prior service cost $ 23,932 $ 29,393
Unrecognized net loss 580,880 713,285
Prepaid/(accrued) pension cost
recognized in the balance sheet $ 30,794 $ (156,451)
Amounts recognized in the balance sheet
(before application of SFAS 158)
Additional minimum pension liability $ (267,003) $ (406,463)
Intangible asset 5,336 24,159
Accumulated OCI (before taxes) 38,273 24,243
Regulatory asset 223,394 358,061
Net amount recognized $ 30,794 $ (156,451)
Change in amount recognized due to SFAS 158
Funded status $ (574,018)
Less: Prepaid/(accrued) pension cost recognized
in the balance sheet before application of
SFAS 158 30,794
Less: Additional minimum pension liability
before application of SFAS 158 (267,003)
Change in amount recognized due to
SFAS 158 $ (337,809)
Amount recognized in the balance sheet
(funded status under SFAS 158)
Non-current liabilities $ (574,018)
Amounts recognized in regulatory assets
Prior service cost $ 14,388
Net loss/(gain) 498,502
Total $ 512,890
Amounts recognized in OCI (before tax)
Prior service cost $ 9,544
Net loss/(gain) 82,378
Total $ 91,922
OTHER POSTRETIREMENT BENEFITS
Entergy also currently provides health care and life insurance benefits
for retired employees. Substantially all 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 postre-
tirement 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 Registrant Subsidiaries recover SFAS 106 costs from cus-
tomers and are required to contribute postretirement benefits
collected in rates to an external trust.
Entergy Arkansas, the portion of Entergy Gulf States regulated by
the PUCT, Entergy Mississippi, and Entergy New Orleans have
received regulatory approval to recover SFAS 106 costs through rates.
Entergy Arkansas began recovery in 1998, pursuant to an APSC
order. This order also allowed Entergy Arkansas to amortize a regula-
tory asset (representing the difference between SFAS 106 costs and
cash expenditures for other postretirement benefits incurred for a five-
year period that began January 1, 1993) over a 15-year period that
began in January 1998.
The LPSC ordered the portion of Entergy Gulf States regulated by
the LPSC and Entergy Louisiana to continue the use of the pay-as-
you-go method for ratemaking purposes for postretirement benefits
other than pensions. However, the LPSC retains the flexibility to
examine individual companies’ accounting for postretirement benefits
to determine if special exceptions to this order are warranted.
Pursuant to regulatory directives, Entergy Arkansas, Entergy
Mississippi, Entergy New Orleans, the portion of Entergy Gulf States
regulated by the PUCT, and System Energy contribute the postretire-
ment benefit obligations collected in rates to trusts. System Energy is
funding, on behalf of Entergy Operations, postretirement benefits
associated with Grand Gulf.
COMPONENTS OF NET OTHER POSTRETIREMENT BENEFIT COST
Total 2006, 2005, and 2004 other postretirement benefit costs of
Entergy Corporation and its subsidiaries, including amounts capitalized
and deferred, included the following components (in thousands):
2006 2005 2004
Service cost – benefits earned
during the period $ 41,480 $ 37,310 $ 30,947
Interest cost on APBO 57,263 51,883 53,801
Expected return on assets (19,024) (17,402) (18,825)
Amortization of transition obligation 2,169 3,368 9,429
Amortization of prior service cost (14,751) (13,738) (5,222)
Recognized net (gain)/loss 22,789 22,295 15,546
Net other postretirement benefit cost $ 89,926 $ 83,716 $ 85,676
Estimated amortization amounts from the regulatory asset or OCI to
net periodic cost in the following year (in thousands):
Transition obligation $ 3,831
Prior service cost $(15,837)
Net loss/(gain) $ 18,974
NOTESto CONSOLIDATED FINANCIAL STATEMENTS continued