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PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS (Tables)
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9 Months Ended |
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Sep. 30, 2014
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| Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] |
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| Net Periodic Cost |
The net periodic pension costs include the following components: | | | | | | | | | | | | | | Nine Months Ended | | Calendar Year Ended December 31, | ($ Millions) | September 30, 2014 | | 2013 | | 2012 | Pension Plans | | | | | | Components of net periodic benefit cost: | | | | | | Service cost | $ | 5.1 |
| | $ | 14.2 |
| | $ | 10.5 |
| Interest cost | 4.1 |
| | 11.2 |
| | 10.8 |
| Expected long-term return on assets | (5.2 | ) | | (14.7 | ) | | (14.1 | ) | Prior service cost amortization | 0.1 |
| | 0.5 |
| | 0.6 |
| Actuarial loss amortization | 2.2 |
| | 14.0 |
| | 8.6 |
| Amortization of prior regulatory assets and liabilities | 0.4 |
| | — |
| | — |
| Settlement charge | 10.1 |
| | 1.4 |
| | — |
| Net periodic expense | $ | 16.8 |
| | $ | 26.6 |
| | $ | 16.4 |
| | | | | | | Postretirement Benefit Plans | | | | | | Components of net periodic benefit cost: | | | | | | Service cost | $ | 0.4 |
| | $ | 1.7 |
| | $ | 1.9 |
| Interest cost | 1.9 |
| | 3.5 |
| | 4.2 |
| Expected long-term return on assets | (3.6 | ) | | (5.0 | ) | | (4.4 | ) | Actuarial (gain) loss amortization | (1.0 | ) | | (0.1 | ) | | — |
| Transition obligation amortization | — |
| | 1.3 |
| | 1.9 |
| Amortization of prior regulatory assets and liabilities | (0.2 | ) | | — |
| | — |
| Curtailment gain | — |
| | (1.2 | ) | | — |
| Net periodic expense | $ | (2.5 | ) | | $ | 0.2 |
| | $ | 3.6 |
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| Other changes in plan assets and benefit obligations recognized in other comprehensive income |
Obligations recognized in other comprehensive income were as follows: | | | | | | | | | | | | | | Nine Months Ended | | Calendar Year Ended December 31, | ($ Millions) | September 30, 2014 | | 2013 | | 2012 | Pension Plans | | | | | | Net actuarial (gain) loss experienced during the year | $ | 1.5 |
| | $ | (14.1 | ) | | $ | 28.7 |
| Net actuarial loss recognized as expense | — |
| | (8.9 | ) | | (4.9 | ) | Prior service cost recognized as expense | — |
| | (0.3 | ) | | (0.3 | ) | | 1.5 |
| | (23.3 | ) | | 23.5 |
| Transfer to regulatory assets (liabilities) | (1.5 | ) | | — |
| | — |
| Other Comprehensive Income | $ | — |
| | $ | (23.3 | ) | | $ | 23.5 |
| | | | | | | Postretirement Benefit Plans | | | | | | Net actuarial (gain) loss experienced during the year | $ | 1.1 |
| | $ | (8.1 | ) | | $ | (1.8 | ) | Net actuarial gain recognized as expense | — |
| | 0.6 |
| | — |
| Transition obligation recognized as expense | — |
| | (0.3 | ) | | (0.3 | ) | | 1.1 |
| | (7.8 | ) | | (2.1 | ) | Transfer to regulatory assets (liabilities) | (1.1 | ) | | — |
| | — |
| Other Comprehensive Income | $ | — |
| | $ | (7.8 | ) |
| $ | (2.1 | ) |
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| Reconciliation of the beginning and ending balances of benefit obligation |
The following table sets forth the reconciliation of the beginning and ending balances of the pension benefit obligation: | | | | | | | | | | | | | | | | | | September 30, | | December 31, | | September 30, | | December 31, | | 2014 | | 2013 | | 2014 | | 2013 | ($ MIllions) | Pension | | Postretirement Benefits | Accumulated benefit obligation | $ | 129.6 |
| | $ | 253.0 |
| | | | | Benefit obligation: | | | | | | | | Balance at beginning of period | 293.4 |
| | 323.5 |
| | 63.6 |
| | 85.8 |
| Energen portion of liability divested | (144.7 | ) | | — |
| | (13.3 | ) | | — |
| Liability loss due to estimated allocation | 16.9 |
| | — |
| | 7.7 |
| | — |
| Service cost | 5.1 |
| | 14.2 |
| | 0.4 |
| | 1.7 |
| Interest cost | 4.1 |
| | 11.2 |
| | 1.9 |
| | 3.5 |
| Actuarial (gain) loss | 7.8 |
| | (28.3 | ) | | 4.3 |
| | (21.7 | ) | Curtailment gain | — |
| | (4.2 | ) | | — |
| | (1.3 | ) | Retiree drug subsidy program | — |
| | — |
| | 0.3 |
| | 0.3 |
| Benefits paid | (33.8 | ) | | (23.0 | ) | | (4.0 | ) | | (4.7 | ) | Balance at end of period | $ | 148.8 |
| | $ | 293.4 |
| | $ | 60.9 |
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| $ | 63.6 |
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| Changes in fair value of plan assets |
The following table sets forth the reconciliation of the beginning and ending balances of the fair value of plan assets: | | | | | | | | | | | | | | | | | | September 30, | | December 31, | | September 30, | | December 31, | | 2014 | | 2013 | | 2014 | | 2013 | ($ Millions) | Pension | | Postretirement Benefits | Plan assets: | | | | | | | | Fair value of plan assets at beginning of period | $ | 219.5 |
| | $ | 209.3 |
| | $ | 98.9 |
| | $ | 87.1 |
| Energen portion of assets divested | (90.9 | ) | | — |
| | (22.0 | ) | | — |
| Asset gain due to estimated allocation | 15.0 |
| | — |
| | 11.0 |
| | — |
| Actual return on plan assets | 7.8 |
| | 23.0 |
| | 1.4 |
| | 14.9 |
| Employer contributions | 1.6 |
| | 10.2 |
| | 0.3 |
| | 1.6 |
| Benefits paid | (33.8 | ) | | (23.0 | ) | | (4.0 | ) | | (4.7 | ) | Fair value of plan assets at end of period | $ | 119.2 |
| | $ | 219.5 |
| | $ | 85.6 |
| | $ | 98.9 |
| (Unfunded) funded status of plan | $ | (29.6 | ) | | $ | (73.8 | ) | | $ | 24.7 |
| | $ | 35.4 |
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| Amounts recognized in consolidated balance sheets |
The following table sets forth the amounts recognized in the Balance Sheets: | | | | | | | | | | | | | | | | | | September 30, | | December 31, | | September 30, | | December 31, | | 2014 | | 2013 | | 2014 | | 2013 | ($ Millions) | Pension | | Postretirement Benefits | Noncurrent assets | $ | — |
| | $ | — |
| | $ | 24.7 |
| | $ | 35.4 |
| Current liabilities | — |
| | (6.1 | ) | | — |
| | — |
| Noncurrent liabilities | (29.6 | ) | | (67.7 | ) | | — |
| | — |
| Net asset (liability) recognized | $ | (29.6 | ) | | $ | (73.8 | ) | | $ | 24.7 |
| | $ | 35.4 |
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A summary of the Company's allocated share of the benefit plans described above is presented below as of the transition period and calendar year end, respectively: | | | | | | | | | | | | | | | | | | September 30, | | December 31, | | September 30, | | December 31, | | 2014 | | 2013 | | 2014 | | 2013 | ($ MIllions) | Pension | | Postretirement Benefits | Net benefit asset noncurrent | $ | — |
| | $ | — |
| | $ | 24.7 |
| | $ | 26.5 |
| Net benefit liability noncurrent | (29.6 | ) | | (20.2 | ) | | — |
| | — |
| Regulatory asset | 67.8 |
| | 58.5 |
| | 4.7 |
| | — |
| Regulatory liability | $ | (1.9 | ) | | $ | — |
| | $ | (26.6 | ) | | $ | (26.2 | ) |
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| Assumptions used to calculate net periodic cost and benefit obligations. |
Assumptions are used based on the unique set of characteristics for each of the individual pension and postretirement plans. | | | | | | | | | | | Nine Months Ended | | Calendar Years Ended December 31, | | September 30, 2014 | | 2013 | | 2012 | Pension Plans | | | | | | Discount rate | 4.00% & 4.05% |
| | 3.63 | % | | 4.52 | % | Expected long-term return on plan assets | 7.25% & 7.00% |
| | 7.00 | % | | 7.00 | % | Rate of compensation increase for pay-related plans | 2.92 | % | | 3.71 | % | | 3.59 | % | | | | | | | Postretirement Benefit Plans | | | | | | Discount rate | 4.25 | % | | 4.26 | % | | 4.95 | % | Expected long-term return on plan assets | 7.25% & 4.75% |
| | 7.00 | % | | 7.00 | % |
The weighted average rate assumptions used to determine the projected benefit obligations at the measurement date were as follows: | | | | | | | | September 30, 2014 | | December 31, 2013 | Pension Plans | | | | Discount rate | 4.15% & 4.25% |
| | 4.30 | % | Rate of compensation increase for pay-related plans | 2.92 | % | | 3.60 | % | | | | | Postretirement Benefit Plans | | | | Discount rate | 4.40 | % | | 5.00 | % |
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| Schedule of assumed post-65 health care cost trend rates |
The assumed post-65 health care cost trend rates used to determine the postretirement benefit obligation at the measurement date were as follows: | | | | | | | | September 30, 2014 | | December 31, 2013 | Health care cost trend rate assumed for next year | 7.25 | % | | 6.50 | % | Rate to which the cost trend rate is assumed to decline | 5.00 | % | | 5.00 | % | Year that rate reaches ultimate rate | 2020 |
| | 2020 |
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| Schedule of effect of one-percent point change in assumed health care cost trend rates |
Assumed health care cost trend rates used in determining the accumulated postretirement benefit obligation have an effect on the amounts reported. For example, revising the weighted average health care cost trend rate by 1 percentage point would have the following effects: | | | | | | | | | ($ Millions) | 1-Percentage Point Decrease | | 1-Percentage Point Increase | Effect on total of service and interest cost | $ | — |
| | $ | — |
| Effect on net postretirement benefit obligation | (0.7 | ) | | 0.7 |
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| Targeted and actual plan assets by category |
Following are the targeted and actual plan assets by asset category: | | | | | | | | | | | | | | | | | | | | Pension | | Postretirement Benefits | | Target | | September 30, 2014 | | December 31, 2013 | | Target | | September 30, 2014 | | December 31, 2013 | Asset category: | | | | | | | | | | | | Equity securities | 41.0 | % | | 51.0 | % | | 34.0 | % | | 60.0 | % | | 60.0 | % | | 61.0 | % | Debt securities | 38.0 | % | | 36.0 | % | | 28.0 | % | | 40.0 | % | | 40.0 | % | | 39.0 | % | Other | 21.0 | % | | 13.0 | % | | 38.0 | % | | — | % | | — | % | | — | % | Total | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
Plan assets included in the funded status of the postretirement benefit plans were as follows: | | | | | | | | | | | | | | September 30, 2014 | ($ Millions) | Level 1 | | Level 2 | | Total | United States equities (1) | $ | 43.9 |
| | $ | — |
| | $ | 43.9 |
| Global equities (2) | 7.2 |
| | — |
| | 7.2 |
| Fixed income (3) | — |
| | 34.4 |
| | 34.4 |
| Cash and cash equivalents | 0.1 |
| | — |
| | 0.1 |
| Total | $ | 51.2 |
| | $ | 34.4 |
| | $ | 85.6 |
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| | | | | | | | | | | | | | December 31, 2013 | ($ Millions) | Level 1 | | Level 2 | | Total | United States equities | $ | 43.1 |
| | $ | — |
| | $ | 43.1 |
| Global equities | 17.0 |
| | — |
| | 17.0 |
| Fixed income | — |
| | 38.8 |
| | 38.8 |
| Cash and cash equivalents | — |
| | — |
| | — |
| Total | $ | 60.1 |
| | $ | 38.8 |
| | $ | 98.9 |
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Plan assets included in the funded status of the pension plans were as follows: | | | | | | | | | | | | | | | | | | September 30, 2014 | ($ Millions) | Level 1 | | Level 2 | Level 3 | Total | United States equities (1) | $ | 30.4 |
| | $ | 13.6 |
| | $ | — |
| | $ | 44.0 |
| Global equities (2) | 12.3 |
| | 0.0 |
| | — |
| | 12.3 |
| Fixed income (3) | 11.5 |
| | 31.9 |
| | — |
| | 43.4 |
| Alternative investments (4) | — |
| | 17.6 |
| | — |
| | 17.6 |
| Cash and cash equivalents | 0.3 |
| | 1.6 |
| | — |
| | 1.9 |
| Total | $ | 54.5 |
| | $ | 64.7 |
| | $ | — |
| | $ | 119.2 |
| | | | | | | | | | December 31, 2013 | ($ Millions) | Level 1 | | Level 2 | Level 3 | Total | United States equities (1) | $ | 34.1 |
| | $ | 8.1 |
| | $ | — |
| | $ | 42.2 |
| Global equities (2) | 20.1 |
| | 13.3 |
| | — |
| | 33.4 |
| Fixed income (3) | — |
| | 61.1 |
| | — |
| | 61.1 |
| Alternative investments (4) | — |
| | 37.3 |
| | — |
| | 37.3 |
| Cash and cash equivalents | 6.0 |
| | 39.5 |
| | — |
| | 45.5 |
| Total | $ | 60.2 |
| | $ | 159.3 |
| | $ | — |
| | $ | 219.5 |
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| Reconciliation of plan assets in Level 3 of fair value hierarchy |
The following is a reconciliation of plan assets in Level 3 of the fair value hierarchy: | | | | | | | | | | Nine Months Ending September 30, | | Calendar Year Ending December 31, | ($ Millions) | 2014 | | 2013 | Balance at beginning of period | $ | — |
| | $ | 14.5 |
| Transfer out of level 3 | — |
| | (14.5 | ) | Balance at end of period | $ | — |
| | $ | — |
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| Expected benefit payments for the succeeding five fiscal years |
The following benefit payments, which reflect expected future service, as appropriate, are anticipated to be paid as follows. In addition, the following benefits reflect the expected prescription drug subsidy related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Act). The Act includes a prescription drug benefit under Medicare Part D as well as a federal subsidy which began in 2007: | | | | | | | | | | | | | ($ Millions) |
Pension Benefits | | Postretirement Benefits | | Postretirement Benefits – Prescription Drug Subsidy | 2015 | $ | 9.9 |
| | $ | 3.8 |
| | $ | (0.2 | ) | 2016 | 10.2 |
| | 3.8 |
| | (0.2 | ) | 2017 | 10.6 |
| | 3.8 |
| | (0.2 | ) | 2018 | 10.6 |
| | 3.8 |
| | (0.2 | ) | 2019 | 11.2 |
| | 3.8 |
| | (0.3 | ) | 2020-2024 | 58.7 |
| | 18.6 |
| | (1.3 | ) |
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