Xcel Energy 2002 Annual Report Download - page 61

The components of net periodic pension cost (credit) are:
(Thousands of dollars) 2002 2001 2000
Service cost $ 65,649 $ 57,521 $ 59,066
Interest cost 172,377 172,159 172,063
Expected return on plan assets (339,932) (325,635) (292,580)
Curtailment –1,121 –
Amortization of transition asset (7,314) (7,314) (7,314)
Amortization of prior service cost 22,663 20,835 19,197
Amortization of net gain (69,264) (72,413) (60,676)
Net periodic pension cost (credit) under SFAS No. 87 $(155,821) $(153,726) $(110,244)
Credits not recognized due to effects of regulation 71,928 76,509 49,697
Net benefit cost (credit) recognized for financial reporting $(83,893) $(77,217) $ (60,547)
Xcel Energy also maintains noncontributory, defined benefit supplemental retirement income plans for certain qualifying executive personnel.
Benefits for these unfunded plans are paid out of Xcel Energy’s operating cash flows.
Defined Contribution Plans Xcel Energy maintains 401(k) and other defined contribution plans that cover substantially all employees.
Total contributions to these plans were approximately $23 million in 2002, $29 million in 2001 and $24 million in 2000.
Until May 6, 2002, Xcel Energy had a leveraged employee stock ownership plan (ESOP) that covered substantially all employees of
NSP-Minnesota and NSP-Wisconsin. Xcel Energy made contributions to this noncontributory, defined contribution plan to the extent
it realized tax savings from dividends paid on certain ESOP shares. ESOP contributions had no material effect on Xcel Energy earnings
because the contributions were essentially offset by the tax savings provided by the dividends paid on ESOP shares. Xcel Energy allocated
leveraged ESOP shares to participants when it repaid ESOP loans with dividends on stock held by the ESOP.
In May 2002, the ESOP was terminated and its assets were combined into the Xcel Energy retirement savings 401(k) plan. Starting with
the 2003 plan year, the ESOP component of the 401(k) plan will no longer be leveraged.
Xcel Energy’s leveraged ESOP held no shares of Xcel Energy common stock at the end of 2002, 10.7 million shares of Xcel Energy
common stock at May 6, 2002, 10.5 million shares of Xcel Energy common stock at the end of 2001 and 12 million shares of Xcel
Energy common stock at the end of 2000. Xcel Energy excluded the following average number of uncommitted leveraged ESOP shares
from earnings per share calculations: 0.7 million in 2002, 0.9 million in 2001 and 0.7 million in 2000. On Nov. 19, 2002, Xcel Energy
paid off all of the ESOP loans. All uncommitted ESOP shares were released and will be used by Xcel Energy for the 2002 employer
matching contribution to its 401(k) plan.
Postretirement Health Care Benefits Xcel Energy has contributory health and welfare benefit plans that provide health care and death
benefits to most Xcel Energy retirees. The former NSP discontinued contributing toward health care benefits for nonbargaining
employees retiring after 1998 and for bargaining employees of NSP-Minnesota and NSP-Wisconsin who retired after 1999. However,
employees of the former NCE who retired in 2002 continue to receive employer-subsidized health care benefits. Employees of the
former NSP who retired after 1998 are eligible to participate in the Xcel Energy health care program with no employer subsidy.
In conjunction with the 1993 adoption of SFAS No. 106 – “Employers’ Accounting for Postretirement Benefits Other Than Pension,” Xcel
Energy elected to amortize the unrecognized accumulated postretirement benefit obligation (APBO) on a straight-line basis over 20 years.
Regulatory agencies for nearly all of Xcel Energy’s retail and wholesale utility customers have allowed rate recovery of accrued benefit
costs under SFAS No. 106. PSCo transitioned to full accrual accounting for SFAS No. 106 costs between 1993 and 1997, consistent
with the accounting requirements for rate-regulated enterprises. The Colorado jurisdictional SFAS No. 106 costs deferred during the
transition period are being amortized to expense on a straight-line basis over the 15-year period from 1998 to 2012. NSP-Minnesota
also transitioned to full accrual accounting for SFAS No. 106 costs, with regulatory differences fully amortized prior to 1997.
Certain state agencies that regulate Xcel Energy’s utility subsidiaries have also issued guidelines related to the funding of SFAS No. 106
costs. SPS is required to fund SFAS No. 106 costs for Texas and New Mexico jurisdictional amounts collected in rates, and PSCo is required
to fund SFAS No. 106 costs in irrevocable external trusts that are dedicated to the payment of these postretirement benefits. Minnesota
and Wisconsin retail regulators required external funding of accrued SFAS No. 106 costs to the extent such funding is tax advantaged. Plan
assets held in external funding trusts principally consist of investments in equity mutual funds, fixed-income securities and cash equivalents.
notes to consolidated financial statements
xcel energy inc. and subsidiaries page 75