Entergy 2008 Annual Report Download - page 93

9191
ENTERGY CORPORATION AND SUBSIDIARIES 2008
91
Notes to Consolidated Financial Statements continued
91
Gulf States Louisiana and Entergy Louisiana recover other
postretirement benefits costs on a pay as you go basis and recorded
the unrecognized prior service cost, gains and losses, and transition
obligation for its other postretirement benefit obligation as other
comprehensive income. SFAS 158 also requires that changes in the
funded status be recorded as other comprehensive income and/or
a regulatory asset in the period in which the changes occur.
CO M P O N E N T S O F QU A L I F I E D NE T PE N S I O N CO S T A N D OT H E R
AM O U N T S RE C O G N I Z E D A S A RE G U L A T O R Y AS S E T A N D/O R
AC C U M U L A T E D OT H E R CO M P R E H E N S I V E IN C O M E (AOCI)
Entergy Corporation’s and its subsidiaries’ total 2008, 2007,
and 2006 qualified pension costs and amounts recognized as a
regulatory asset and/or other comprehensive income, including
amounts capitalized, included the following components:
(in thousands):
2008 2007 2006
Net periodic pension cost:
Service cost - benefits earned
during the period $ 90,392 $ 96,565 $ 92,706
Interest cost on projected
benefit obligation 206,586 185,170 167,257
Expected return on assets (230,558) (203,521) (177,930)
Amortization of prior
service cost 5,063 5,531 5,462
Recognized net loss 26,834 45,775 43,721
Curtailment loss – 2,336 –
Special termination benefit
loss – 4,018 –
Net periodic pension costs $ 98,317 $ 135,874 $ 131,216
Other changes in plan assets
and benefit obligations
recognized as a regulatory asset
and/or AOCI (before tax)
Arising this period:
Prior service cost $ – $ 11,339
Net (gain)/loss 965,069 (68,853)
Amounts reclassified from
regulatory asset and/or
accumulated AOCI
to net periodic pension cost in
the current year:
Amortization of prior
service credit (5,063) (5,531)
Amortization of net loss (26,834) (45,775)
Total $ 933,172 $(108,820)
Total recognized as net periodic
pension cost, regulatory asset,
and/or AOCI (before tax) $1,031,489 $ 27,054
Estimated amortization
amounts from regulatory
asset and/or AOCI to net
periodic cost in
the following year
Prior service cost $ 4,997 $ 5,064 $ 5,531
Net loss $ 22,401 $ 25,641 $ 44,316
QU A L I F I E D PE N S I O N OB L I G A T I O N S , PL A N AS S E T S , FU N D E D
ST A T U S , AM O U N T S NO T YE T RE C O G N I Z E D A N D RE C O G N I Z E D
IN T H E BA L A N C E SH E E T F O R EN T E R G Y CO R P O R A T I O N A N D I T S
SU B S I D I A R I E S A S O F DE C E M B E R 31, 2008 A N D 2007
(IN T H O U S A N D S):
2008 2007
Change in Projected Benefit Obligation (PBO)
Balance at beginning of year $ 3,247,724 $3,122,043
Service cost 90,392 96,565
Interest cost 206,586 185,170
Acquisitions and amendments – 52,142
Curtailments – 2,603
Special termination benefits – 4,018
Actuarial gain (89,124) (81,757)
Employee contributions 902 971
Benefits paid (151,165) (134,031)
Balance at end of year $ 3,305,315 $3,247,724
Change in Plan Assets
Fair value of assets at beginning of year $ 2,764,383 $2,508,354
Actual return on plan assets (823,636) 190,616
Employer contributions 287,768 176,742
Employee contributions 902 971
Acquisition – 21,731
Benefits paid (151,165) (134,031)
Fair value of assets at end of year $ 2,078,252 $2,764,383
Funded status $(1,227,063) $ (483,341)
Amount recognized in the balance sheet
Non-current liabilities $(1,227,063) $ (483,341)
Amount recognized as a regulatory asset
Prior service cost $ 20,548 $ 16,564
Net loss 1,150,298 436,789
$ 1,170,846 $ 453,353
Amount recognized as AOCI (before tax)
Prior service cost $ 4,941 $ 2,649
Net loss 276,635 69,581
$ 281,576 $ 72,230
OT H E R PO S T R E T I R E M E N T BE N E F I T S
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 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 the former Entergy Gulf States) and $128
million for the former Entergy Gulf States (now split into Entergy
Gulf States Louisiana and Entergy Texas.) 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
customers and are required to contribute postretirement benefits
collected in rates to an external trust.