Retirement Benefits

12 Months Ended

Dec. 31, 2011

RETIREMENT BENEFITS

2. RETIREMENT BENEFITS

Southern Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2011. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2012. Southern Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, Southern Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions. For the year ending December 31, 2012, other postretirement trust contributions are expected to total approximately $31 million.

Actuarial Assumptions

The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2008 for the 2009 plan year using a discount rate of 6.75% and an annual salary increase of 3.75%.

	2011			2010			2009
Discount rate:
Pension plans		4.98	%		5.52	%	5.93%
Other postretirement benefit plans		4.88			5.40		5.83
Annual salary increase		3.84			3.84		4.18
Long-term return on plan assets:
Pension plans*		8.45			8.45		8.20
Other postretirement benefit plans		7.39			7.40		7.51

* Net of estimated investment management expenses of 30 basis points.

The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio.

An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) is the weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO as of December 31, 2011 were as follows:

	Initial Cost     Trend Rate	Ultimate            Cost Trend            Rate	Year That   Ultimate   Rate Is   Reached
Pre-65	8.00%	5.00%	2019
Post-65 medical	6.00	5.00	2019
Post-65 prescription	6.00	5.00	2023

An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2011 as follows:

	1 Percent Increase		1 Percent   Decrease
	(in millions)
Benefit obligation		$125		$(106)
Service and interest costs		7		(6)

Pension Plans

The total accumulated benefit obligation for the pension plans was $7.4 billion at December 31, 2011 and $6.7 billion at December 31, 2010. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

		$(1,279)			$(1,279)
	2011			2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	7,223		$	6,758
Service cost		184			172
Interest cost		389			391
Benefits paid		(324	)		(296)
Actuarial loss (gain)		607			198
Balance at end of year		8,079			7,223
Change in plan assets
Fair value of plan assets at beginning of year		6,834			5,627
Actual return (loss) on plan assets		256			859
Employer contributions		34			644
Benefits paid		(324	)		(296)
Fair value of plan assets at end of year		6,800			6,834
Accrued liability	$	(1,279	)	$	(389)

At December 31, 2011, the projected benefit obligations for the qualified and non-qualified pension plans were $7.5 billion and $0.5 billion, respectively. All pension plan assets are related to the qualified pension plan.

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s pension plans consist of the following:

		$(1,279)			$(1,279)
	2011			2010
	(in millions)
Prepaid pension costs	$	—		$	88
Other regulatory assets, deferred		2,614			1,749
Other current liabilities		(34	)		(28)
Employee benefit obligations		(1,245	)		(449)
Accumulated OCI		109			68

Presented below are the amounts included in accumulated OCI and regulatory assets at December 31, 2011 and 2010 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2012.

	Prior Service Cost		Net (Gain) Loss
	(in millions)
Balance at December 31, 2011:
Accumulated OCI		$    7		$   102
Regulatory assets		128		2,486
Total		$135		$2,588
Balance at December 31, 2010:
Accumulated OCI		$    8		$     60
Regulatory assets		159		1,590
Total		$167		$1,650
Estimated amortization in net periodic pension cost in 2012:
Accumulated OCI		$    1		$       4
Regulatory assets		29		91
Total		$  30		$     95

The components of OCI and the changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2011 and 2010 are presented in the following table:

	Accumulated OCI		Regulatory         Assets
	(in millions)
Balance at December 31, 2009		$  74		$1,894
Net (gain) loss		(4)		(106)
Change in prior service costs		—		2
Reclassification adjustments:
Amortization of prior service costs		(1)		(32)
Amortization of net gain (loss)		(1)		(9)
Total reclassification adjustments		(2)		(41)
Total change		(6)		(145)
Balance at December 31, 2010		$  68		$1,749
Net (gain) loss		43		915
Change in prior service costs		—		1
Reclassification adjustments:
Amortization of prior service costs		(1)		(31)
Amortization of net gain (loss)		(1)		(20)
Total reclassification adjustments		(2)		(51)
Total change		41		865
Balance at December 31, 2011		$109		$2,614

Components of net periodic pension cost were as follows:

	2011			2010			2009
	(in millions)
Service cost	$	184		$	172		$	146
Interest cost		389			391			387
Expected return on plan assets		(607	)		(552	)		(541)
Recognized net loss		21			10			7
Net amortization		32			33			35
Net periodic pension cost	$	19		$	54		$	34

Net periodic pension cost is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets. Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2011, estimated benefit payments were as follows:

	Benefit Payments
	(in millions)
2012		$    361
2013		380
2014		398
2015		418
2016		438
2017 to 2021		2,488

Other Postretirement Benefits

Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	1,752	$	1,759
Service cost		21		25
Interest cost		92		100
Benefits paid		(103)		(95)
Actuarial loss (gain)		29		(41)
Plan amendments		(12)		(2)
Retiree drug subsidy		8		6
Balance at end of year		1,787		1,752
Change in plan assets
Fair value of plan assets at beginning of year		802		743
Actual return (loss) on plan assets		4		82
Employer contributions		54		66
Benefits paid		(95)		(89)
Fair value of plan assets at end of year		765		802
Accrued liability	$	(1,022)	$	(950)

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s other postretirement benefit plans consist of the following:

	2011		2010
	(in millions)
Other regulatory assets, deferred	$	345	$	292
Other current liabilities		(4)		(1)
Employee benefit obligations		(1,018)		(949)
Accumulated OCI		6		3

Presented below are the amounts included in accumulated OCI and regulatory assets at December 31, 2011 and 2010 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2012.

	Prior Service Cost		Net (Gain) Loss		Transition Obligation
			(in millions)
Balance at December 31, 2011:
Accumulated OCI		$—		$    6		$—
Regulatory assets		17		314		14
Total		$17		$320		$14
Balance at December 31, 2010:
Accumulated OCI		$—		$    3		$—
Regulatory assets		34		233		25
Total		$34		$236		$25
Estimated amortization as net periodic postretirement benefit cost in 2012:
Accumulated OCI		$—		$  —		$—
Regulatory assets		4		6		10
Total		$  4		$    6		$10

The components of OCI, along with the changes in the balance of regulatory assets, related to the other postretirement benefit plans for the plan years ended December 31, 2011 and 2010 are presented in the following table:

	Accumulated OCI		Regulatory         Assets
	(in millions)
Balance at December 31, 2009		$  5		$  374
Net (gain) loss		(2)		(60)
Change in prior service costs/transition obligation		—		(2)
Reclassification adjustments:
Amortization of transition obligation		—		(10)
Amortization of prior service costs		—		(5)
Amortization of net gain (loss)		—		(5)
Total reclassification adjustments		—		(20)
Total change		(2)		(82)
Balance at December 31, 2010		$  3		$  292
Net (gain) loss		3		84
Change in prior service costs/transition obligation		—		(12)
Reclassification adjustments:
Amortization of transition obligation		—		(10)
Amortization of prior service costs		—		(5)
Amortization of net gain (loss)		—		(4)
Total reclassification adjustments		—		(19)
Total change		3		53
Balance at December 31, 2011		$  6		$  345

Components of the other postretirement benefit plans’ net periodic cost were as follows:

	2011		2010		2009
	(in millions)
Service cost		$  21		$  25		$  26
Interest cost		92		100		113
Expected return on plan assets		(64)		(63)		(61)
Net amortization		20		20		25
Net postretirement cost		$  69		$  82		$103

Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 as follows:

	Benefit Payments	Subsidy Receipts	Total
	(in millions)
2012	$110	$(10)	$100
2013	116	(12)	104
2014	122	(13)	109
2015	128	(15)	113
2016	133	(16)	117
2017 to 2021	691	(90)	601

Benefit Plan Assets

Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension plan and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk.

The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2011 and 2010, along with the targeted mix of assets for each plan, is presented below:

	Target	2011			2010
Pension plan assets:
Domestic equity	26%		29	%	29%
International equity	25		25		27
Fixed income	23		23		22
Special situations	3		—		—
Real estate investments	14		14		13
Private equity	9		9		9
Total	100%		100	%	100%
Other postretirement benefit plan assets:
Domestic equity	41%		39	%	40%
International equity	17		18		21
Domestic fixed income	30		31		29
Global fixed income	3		4		3
Special situations	1		—		—
Real estate investments	5		5		4
Private equity	3		3		3
Total	100%		100	%	100%

The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices.

Investment Strategies

Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above:

• Domestic equity. A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes managed both actively and through passive index approaches.

• International equity. An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.

• Fixed income. A mix of domestic and international bonds.

• Trust-owned life insurance. Investments of the Company’s taxable trusts aimed at minimizing the impact of taxes on the portfolio.

• Special situations. Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies as well as investments in promising new strategies of a longer-term nature.

• Real estate investments. Investments in traditional private market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.

• Private equity. Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.

Benefit Plan Asset Fair Values

Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2011 and 2010. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate.

Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund.

The fair values of pension plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
	Quoted Prices   in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant   Unobservable   Inputs
As of December 31, 2011:	(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Assets:
Domestic equity*		$1,155		$   533		$    —		$1,688
International equity*		1,187		340		—		1,527
Fixed income:
U.S. Treasury, government, and agency bonds		—		433		—		433
Mortgage- and asset-backed securities		—		135		—		135
Corporate bonds		—		832		3		835
Pooled funds		—		380		—		380
Cash equivalents and other		1		139		—		140
Real estate investments		220		—		782		1,002
Private equity		—		—		582		582
Total		$2,563		$2,792		$1,367		$6,722

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
	Quoted Prices   in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant   Unobservable   Inputs
As of December 31, 2010:	(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Assets:
Domestic equity*		$1,266		$   511		$       1		$1,778
International equity*		1,277		443		—		1,720
Fixed income:
U.S. Treasury, government, and agency bonds		—		304		—		304
Mortgage- and asset-backed securities		—		247		—		247
Corporate bonds		—		594		2		596
Pooled funds		—		201		—		201
Cash equivalents and other		2		478		—		480
Real estate investments		184		—		674		858
Private equity		—		—		638		638
Total		$2,729		$2,778		$1,315		$6,822
Liabilities:
Derivatives		(1)		—		—		(1)
Total		$2,728		$2,778		$1,315		$6,821

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	Real Estate   Investments	Private Equity	Real Estate     Investments	Private Equity
	(in millions)
Beginning balance	$674	$638	$547	$555
Actual return on investments:
Related to investments held at year end	72	(12)	59	67
Related to investments sold during the year	20	47	18	18
Total return on investments	92	35	77	85
Purchases, sales, and settlements	16	(91)	50	(2)
Transfers into/out of Level 3	—	—	—	—
Ending balance	$782	$582	$674	$638

The fair values of other postretirement benefit plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices   in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant   Unobservable   Inputs (Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$156	$  38	$—	$194
International equity*	45	39	—	84
Fixed income:
U.S. Treasury, government, and agency bonds	—	24	—	24
Mortgage- and asset-backed securities	—	5	—	5
Corporate bonds	—	32	—	32
Pooled funds	—	48	—	48
Cash equivalents and other	—	46	—	46
Trust-owned life insurance	—	291	—	291
Real estate investments	9	—	30	39
Private equity	—	—	23	23
Total	$210	$523	$53	$786

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
	Quoted Prices   in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant   Unobservable   Inputs
As of December 31, 2010:	(Level 1)	(Level 2)	(Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$176	$  45	$—	$221
International equity*	49	50	—	99
Fixed income:
U.S. Treasury, government, and agency bonds	—	15	—	15
Mortgage- and asset-backed securities	—	10	—	10
Corporate bonds	—	23	—	23
Pooled funds	—	34	—	34
Cash equivalents and other	—	41	—	41
Trust-owned life insurance	—	291	—	291
Real estate investments	7	—	26	33
Private equity	—	—	23	23
Total	$232	$509	$49	$790

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	Real Estate   Investments	Private Equity	Real Estate     Investments	Private Equity
	(in millions)
Beginning balance	$26	$23	$24	$24
Actual return on investments:
Related to investments held at year end	3	—	2	1
Related to investments sold during the year	1	2	—	—
Total return on investments	4	2	2	1
Purchases, sales, and settlements	—	(2)	—	(2)
Transfers into/out of Level 3	—	—	—	—
Ending balance	$30	$23	$26	$23

Employee Savings Plan

Southern Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2011, 2010, and 2009 were $78 million, $76 million, and $78 million, respectively.

Alabama Power [Member]

RETIREMENT BENEFITS

2. RETIREMENT BENEFITS

The Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2011. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2012. The Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, the Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The Company funds its other postretirement trusts to the extent required by the Alabama PSC and the FERC. For the year ending December 31, 2012, other postretirement trust contributions are expected to total approximately $8 million.

Actuarial Assumptions

The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2008 for the 2009 plan year using a discount rate of 6.75% and an annual salary increase of 3.75%.

	2011			2010			2009
Discount rate:
Pension plans		4.98	%		5.52	%		5.93%
Other postretirement benefit plans		4.88			5.41			5.84
Annual salary increase		3.84			3.84			4.18
Long-term return on plan assets:
Pension plans*		8.45			8.45			8.20
Other postretirement benefit plans		7.39			7.43			7.52

* Net of estimated investment management expenses of 30 basis points.

The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio.

An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) is the weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO as of December 31, 2011 were as follows:

	Initial Cost Trend Rate	Ultimate Cost Trend Rate	Year That    Ultimate Rate Is Reached
Pre-65	8.00%	5.00%	2019
Post-65 medical	6.00	5.00	2019
Post-65 prescription	6.00	5.00	2023

An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2011 as follows:

	1 Percent Increase	1 Percent     Decrease
	(in millions)
Benefit obligation	$32	$(27)
Service and interest costs	2	(2)

Pension Plans

The total accumulated benefit obligation for the pension plans was $1.8 billion at December 31, 2011 and $1.7 billion at December 31, 2010. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011			2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	1,779		$	1,675
Service cost		43			41
Interest cost		96			97
Benefits paid		(88	)		(81)
Actuarial loss (gain)		102			47
Balance at end of year		1,932			1,779
Change in plan assets
Fair value of plan assets at beginning of year		1,933			1,712
Actual return (loss) on plan assets		32			258
Employer contributions		8			44
Benefits paid		(88	)		(81)
Fair value of plan assets at end of year		1,885			1,933
(Accrued liability) prepaid pension asset	$	(47	)	$	154

At December 31, 2011, the projected benefit obligations for the qualified and non-qualified pension plans were $1.8 billion and $106 million, respectively. All pension plan assets are related to the qualified pension plan.

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s pension plans consist of the following:

	2011			2010
	(in millions)
Prepaid pension costs	$	59		$	257
Other regulatory assets, deferred		727			497
Other current liabilities		(7	)		(7)
Employee benefit obligations		(99	)		(96)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated     Amortization     in 2012
			(in millions)
Prior service cost	$	33		$  41	$    7
Net (gain) loss		694		456	23
Other regulatory assets, deferred	$	727		$497

The changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory     Assets
	(in millions)
Balance at December 31, 2009		$549
Net (gain) loss		(42)
Change in prior service costs		1
Reclassification adjustments:
Amortization of prior service costs		(9)
Amortization of net gain (loss)		(2)
Total reclassification adjustments		(11)
Total change		(52)
Balance at December 31, 2010		$497
Net (gain) loss		243
Change in prior service costs		—
Reclassification adjustments:
Amortization of prior service costs		(9)
Amortization of net gain (loss)		(4)
Total reclassification adjustments		(13)
Total change		230
Balance at December 31, 2011		$727

Components of net periodic pension cost (income) were as follows:

	2011			2010			2009
	(in millions)
Service cost	$	43		$	41		$	34
Interest cost		96			97			96
Expected return on plan assets		(173	)		(168	)		(164)
Recognized net (gain) loss		4			2			1
Net amortization		9			9			9
Net periodic pension cost (income)	$	(21	)	$	(19	)	$	(24)

Net periodic pension cost (income) is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets.

Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2011, estimated benefit payments were as follows:

	Benefit Payments
	(in millions)
2012	$  95
2013	99
2014	102
2015	106
2016	110
2017 to 2021	604

Other Postretirement Benefits

Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011			2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	454		$	461
Service cost		5			6
Interest cost		24			26
Benefits paid		(27	)		(26)
Actuarial loss (gain)		11			(16)
Plan amendments		—			—
Retiree drug subsidy		3			3
Balance at end of year		470			454
Change in plan assets
Fair value of plan assets at beginning of year		323			295
Actual return (loss) on plan assets		5			35
Employer contributions		11			16
Benefits paid		(24	)		(23)
Fair value of plan assets at end of year		315			323
Accrued liability	$	(155	)	$	(131)

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s other postretirement benefit plans consist of the following:

	2011			2010
	(in millions)
Regulatory assets	$	96		$	72
Employee benefit obligations		(155	)		(131)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated Amortization in 2012
	(in millions)
Prior service cost	$	26	$	30	$  4
Net (gain) loss		68		37	—
Transition obligation		2		5	2
Regulatory assets	$	96	$	72

The changes in the balance of regulatory assets related to the other postretirement benefit plans for the plan years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory Assets
	(in millions)
Balance at December 31, 2009		$108
Net (gain) loss		(29)
Change in prior service costs/transition obligation		—
Reclassification adjustments:
Amortization of transition obligation		(3)
Amortization of prior service costs		(4)
Amortization of net gain (loss)		—
Total reclassification adjustments		(7)
Total change		(36)
Balance at December 31, 2010		$72
Net (gain) loss		31
Change in prior service costs/transition obligation		—
Reclassification adjustments:
Amortization of transition obligation		(3)
Amortization of prior service costs		(4)
Amortization of net gain (loss)		—
Total reclassification adjustments		(7)
Total change		24
Balance at December 31, 2011		$  96

Components of the other postretirement benefit plans’ net periodic cost were as follows:

	2011			2010			2009
	(in millions)
Service cost	$	5		$	6		$	6
Interest cost		24			26			29
Expected return on plan assets		(25	)		(25	)		(24)
Net amortization		7			7			8
Net postretirement cost	$	11		$	14		$	19

Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 as follows:

	Benefit Payments	Subsidy Receipts		Total
	(in millions)
2012	$  30		$  (3)	$  27
2013	32		(4)	28
2014	34		(4)	30
2015	35		(4)	31
2016	36		(5)	31
2017 to 2021	185		(28)	157

Benefit Plan Assets

Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension plan and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk.

The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2011 and 2010, along with the targeted mix of assets for each plan, is presented below:

	Target		2011		2010
Pension plan assets:
Domestic equity		26%		29%		29%
International equity		25		25		27
Fixed income		23		23		22
Special situations		3		—		—
Real estate investments		14		14		13
Private equity		9		9		9
Total		100%		100%		100%
Other postretirement benefit plan assets:
Domestic equity		46%		41%		41%
International equity		11		14		16
Domestic fixed income		35		38		36
Special situations		1		—		—
Real estate investments		4		4		4
Private equity		3		3		3
Total		100%		100%		100%

The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices.

Investment Strategies

Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above:

• Domestic equity. A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes, managed both actively and through passive index approaches.

• International equity. An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.

• Fixed income. A mix of domestic and international bonds.

• Trust-owned life insurance. Investments of the Company’s taxable trusts aimed at minimizing the impact of taxes on the portfolio.

• Special situations. Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies as well as investments in promising new strategies of a longer-term nature.

• Real estate investments. Investments in traditional private market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.

• Private equity. Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.

Benefit Plan Asset Fair Values

Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2011 and 2010. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate.

Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund.

The fair values of pension plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active     Markets for     Identical     Assets     (Level 1)	Significant     Other     Observable     Inputs     (Level 2)	Significant     Unobservable     Inputs (Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$320	$148	$  —	$	468
International equity*	329	94	—		423
Fixed income:
U.S. Treasury, government, and agency bonds	—	120	—		120
Mortgage- and asset-backed securities	—	37	—		37
Corporate bonds	—	232	1		233
Pooled funds	—	105	—		105
Cash equivalents and other	—	39	—		39
Real estate investments	61	—	217		278
Private equity	—	—	161		161
Total	$710	$775	$379	$	1,864

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices     in Active     Markets for     Identical     Assets     (Level 1)	Significant     Other     Observable     Inputs     (Level 2)	Significant     Unobservable     Inputs     (Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$358	$144	$  —	$	502
International equity*	361	125	—		486
Fixed income:
U.S. Treasury, government, and agency bonds	—	86	—		86
Mortgage- and asset-backed securities	—	70	—		70
Corporate bonds	—	168	1		169
Pooled funds	—	57	—		57
Cash equivalents and other	1	135	—		136
Real estate investments	52	—	191		243
Private equity	—	—	180		180
Total	$772	$785	$372	$	1,929

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	Real Estate     Investments	Private Equity	Real Estate     Investments	Private Equity
	(in millions)
Beginning balance	$191	$180	$166	$169
Actual return on investments:
Related to investments held at year end	16	(3)	14	9
Related to investments sold during the year	6	9	3	3
Total return on investments	22	6	17	12
Purchases, sales, and settlements	4	(25)	8	(1)
Transfers into/out of Level 3	—	—	—	—
Ending balance	$217	$161	$191	$180

The fair values of other postretirement benefit plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active     Markets for     Identical     Assets     (Level 1)	Significant     Other     Observable      Inputs     (Level 2)	Significant     Unobservable     Inputs     (Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$57	$   8	$ —	$  65
International equity*	17	5	—	22
Fixed income:
U.S. Treasury, government, and agency bonds	—	9	—	9
Mortgage- and asset-backed securities	—	2	—	2
Corporate bonds	—	12	—	12
Pooled funds	—	5	—	5
Cash equivalents and other	—	19	—	19
Trust-owned life insurance	—	160	—	160
Real estate investments	4	—	11	15
Private equity	—	—	8	8
Total	$78	$220	$19	$317

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant     Other     Observable     Inputs     (Level 2)		Significant     Unobservable     Inputs     (Level 3)		Total
	(in millions)
Assets:
Domestic equity*		$62		$    7		$—		$    69
International equity*		19		6		—		25
Fixed income:
U.S. Treasury, government, and agency bonds		—		5		—		5
Mortgage- and asset-backed securities		—		4		—		4
Corporate bonds		—		9		—		9
Pooled funds		—		3		—		3
Cash equivalents and other		—		24		—		24
Trust-owned life insurance		—		159		—		159
Real estate investments		3		—		10		13
Private equity		—		—		9		9
Total		$84		$217		$19		$320

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011			2010
	Real Estate Investments		Private Equity	Real Estate Investments	Private Equity
	(in millions)
Beginning balance		$10	$9	$  9	$10
Actual return on investments:
Related to investments held at year end		1	—	1	—
Related to investments sold during the year		—	—	—	—
Total return on investments		1	—	1	—
Purchases, sales, and settlements		—	(1)	—	(1)
Transfers into/out of Level 3		—	—	—	—
Ending balance		$11	$8	$10	$  9

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2011, 2010, and 2009 were $18 million, $18 million, and $19 million, respectively.

Georgia Power [Member]

RETIREMENT BENEFITS

2. RETIREMENT BENEFITS

The Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2011. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2012. The Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, the Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The Company funds its other postretirement trusts to the extent required by the FERC. For the year ending December 31, 2012, other postretirement trust contributions are expected to total approximately $23 million.

Actuarial Assumptions

The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2008 for the 2009 plan year using a discount rate of 6.75% and an annual salary increase of 3.75%.

		0000000000		0000000000		0000000000
	2011		2010		2009
Discount rate:
Pension plans		4.98%		5.52%		5.93%
Other postretirement benefit plans		4.87		5.40		5.83
Annual salary increase		3.84		3.84		4.18
Long-term return on plan assets:
Pension plans*		8.45		8.45		8.20
Other postretirement benefit plans		7.25		7.24		7.35

*Net of estimated investment management expenses of 30 basis points.

The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio.

An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) is the weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO as of December 31, 2011 were as follows:

	Initial Cost     Trend Rate	Ultimate     Cost Trend     Rate	Year That     Ultimate     Rate Is     Reached
Pre-65	8.00%	5.00%	2019
Post-65 medical	6.00	5.00	2019
Post-65 prescription	6.00	5.00	2023

An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2011 as follows:

	1 Percent Increase	1 Percent     Decrease
	(in millions)
Benefit obligation	$61	$(51)
Service and interest costs	3	(3)

Pension Plans

The total accumulated benefit obligation for the pension plans was $2.7 billion at December 31, 2011 and $2.5 billion at December 31, 2010. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

		0000000000		0000000000
	2011		2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year		$  2,674		$  2,517
Service cost		57		54
Interest cost		144		145
Benefits paid		(132)		(127)
Actuarial loss (gain)		166		85
Balance at end of year		2,909		2,674
Change in plan assets
Fair value of plan assets at beginning of year		2,621		2,237
Actual return (loss) on plan assets		76		335
Employer contributions		10		176
Benefits paid		(132)		(127)
Fair value of plan assets at end of year		2,575		2,621
Accrued liability		$   (334)		$     (53)

At December 31, 2011, the projected benefit obligations for the qualified and non-qualified pension plans were $2.8 billion and $148 million, respectively. All pension plan assets are related to the qualified pension plan.

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s pension plans consist of the following:

		0000000000		0000000000
	2011		2010
	(in millions)
Prepaid pension costs		$    —		$    91
Other regulatory assets, deferred		995		689
Current liabilities, other		(10)		(9)
Employee benefit obligations		(324)		(135)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated Amortization in 2012
	(in millions)
Prior service cost		$  48		$  61		$12
Net (gain) loss		947		628		33
Other regulatory assets, deferred		$995		$689

The changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory   Assets
	(in millions)
Balance at December 31, 2009		$734
Net (gain) loss		(30)
Change in prior service costs		—
Reclassification adjustments:
Amortization of prior service costs		(13)
Amortization of net gain (loss)		(2)
Total reclassification adjustments		(15)
Total change		(45)
Balance at December 31, 2010		$689
Net (gain) loss		324
Change in prior service costs		—
Reclassification adjustments:
Amortization of prior service costs		(12)
Amortization of net gain (loss)		(6)
Total reclassification adjustments		(18)
Total change		306
Balance at December 31, 2011		$995

Components of net periodic pension cost (income) were as follows:

		0000000000		0000000000		0000000000
	2011		2010		2009
	(in millions)
Service cost		$    57		$    54		$    48
Interest cost		144		145		147
Expected return on plan assets		(234)		(220)		(216)
Recognized net loss		6		2		2
Net amortization		12		13		14
Net periodic pension cost (income)		$  (15)		$    (6)		$    (5)

Net periodic pension cost (income) is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets.

Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2011, estimated benefit payments were as follows:

	Benefit Payments
	(in millions)
2012		$144
2013		149
2014		154
2015		159
2016		165
2017 to 2021		909

Other Postretirement Benefits

Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

		0000000000		0000000000
	2011		2010
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year		$    786		$    782
Service cost		7		9
Interest cost		41		44
Benefits paid		(48)		(44)
Actuarial (gain)/loss		(4)		(7)
Plan amendments		(12)		—
Retiree drug subsidy		4		2
Balance at end of year		774		786
Change in plan assets
Fair value of plan assets at beginning of year		393		369
Actual return (loss) on plan assets		(4)		37
Employer contributions		20		29
Benefits paid		(44)		(42)
Fair value of plan assets at end of year		365		393
Accrued liability		$  (409)		$  (393)

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s other postretirement benefit plans consist of the following:

		0000000000		0000000000
	2011		2010
	(in millions)
Regulatory assets		$    186		$    179
Employee benefit obligations		(409)		(393)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated     Amortization     in 2012
	(in millions)
Prior service cost		$  (4)		$  10		$—
Net (gain) loss		179		152		4
Transition obligation		11		17		6
Regulatory assets		$186		$179

The changes in the balance of regulatory assets related to the other postretirement benefit plans for the plan years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory   Assets
	(in millions)
Balance at December 31, 2009		$202
Net (gain) loss		(13)
Change in prior service costs/transition obligation		—
Reclassification adjustments:
Amortization of transition obligation		(6)
Amortization of prior service costs		(1)
Amortization of net gain (loss)		(3)
Total reclassification adjustments		(10)
Total change		(23)
Balance at December 31, 2010		$179
Net (gain) loss		29
Change in prior service costs/transition obligation		(12)
Reclassification adjustments:
Amortization of transition obligation		(6)
Amortization of prior service costs		(1)
Amortization of net gain (loss)		(3)
Total reclassification adjustments		(10)
Total change		7
Balance at December 31, 2011		$186

Components of the other postretirement benefit plans’ net periodic cost were as follows:

		0000000000		0000000000		0000000000
	2011		2010		2009
	(in millions)
Service cost		$    7		$    9		$  10
Interest cost		41		44		50
Expected return on plan assets		(30)		(30)		(30)
Net amortization		11		10		13
Net postretirement cost		$  29		$  33		$  43

Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 as follows:

	Benefit Payments	Subsidy Receipts	Total
	(in millions)
2012	$  49	$  (4)	$ 45
2013	51	(5)	46
2014	54	(5)	49
2015	56	(6)	50
2016	58	(7)	51
2017 to 2021	298	(38)	260

Benefit Plan Assets

Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension plan and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk.

The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2011 and 2010, along with the targeted mix of assets for each plan, is presented below:

	Target	2011	2010
Pension plan assets:
Domestic equity	26%	29%	29%
International equity	25	25	27
Fixed income	23	23	22
Special situations	3	—	—
Real estate investments	14	14	13
Private equity	9	9	9
Total	100%	100%	100%
Other postretirement benefit plan assets:
Domestic equity	41%	39%	41%
International equity	21	22	24
Domestic fixed income	25	26	30
Global fixed income	7	8	—
Special situations	1	—	—
Real estate investments	3	3	3
Private equity	2	2	2
Total	100%	100%	100%

The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices.

Investment Strategies

Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above:

• Domestic equity. A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes, managed both actively and through passive index approaches.

• International equity. An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.

• Fixed income. A mix of domestic and international bonds.

• Trust-owned life insurance. Investments of the Company’s taxable trusts aimed at minimizing the impact of taxes on the portfolio.

• Special situations. Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies as well as investments in promising new strategies of a longer-term nature.

• Real estate investments. Investments in traditional private-market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.

• Private equity. Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.

Benefit Plan Asset Fair Values

Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2011 and 2010. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate.

Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund.

The fair values of pension plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are included in real estate investments and private equities in the tables below.

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
As of December 31, 2011:	(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Assets:
Domestic equity*	$	437	$	202	$	—	$	639
International equity*		449		129		—		578
Fixed income:
U.S. Treasury, government, and agency bonds		—		164		—		164
Mortgage- and asset-backed securities		—		51		—		51
Corporate bonds		—		316		1		317
Pooled funds		—		144		—		144
Cash equivalents and other		—		53		—		53
Real estate investments		83		—		296		379
Private equity		—		—		220		220
Total	$	969	$	1,059	$	517	$	2,545

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
As of December 31, 2010:	(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Assets:
Domestic equity*	$	486	$	196	$	—	$	682
International equity*		490		170		—		660
Fixed income:
U.S. Treasury, government, and agency bonds		—		117		—		117
Mortgage- and asset-backed securities		—		95		—		95
Corporate bonds		—		226		1		227
Pooled funds		—		77		—		77
Cash equivalents and other		1		183		—		184
Real estate investments		71		—		258		329
Private equity		—		—		245		245
Total	$	1,048	$	1,064	$	504	$	2,616

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011				2010
	Real Estate     Investments		Private Equity		Real Estate Investments		Private Equity
	(in millions)
Beginning balance		$258		$245		$217		$221
Actual return on investments:
Related to investments held at year end		24		(5)		15		18
Related to investments sold during the year		8		14		7		7
Total return on investments		32		9		22		25
Purchases, sales, and settlements		6		(34)		19		(1)
Transfers into/out of Level 3		—		—		—		—
Ending balance		$296		$220		$258		$245

The fair values of other postretirement benefit plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices         in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant         Unobservable Inputs (Level 3)	Total
	(in millions)
Assets:
Domestic equity*	$ 85		$  24	$—		$109
International equity*	15		31	—		46
Fixed income:
U.S. Treasury, government, and agency bonds	—		5	—		5
Mortgage- and asset-backed securities	—		1	—		1
Corporate bonds	—		10	—		10
Pooled funds	—		38	—		38
Cash equivalents and other	—		26	—		26
Trust-owned life insurance	—		131	—		131
Real estate investments	3		—	9		12
Private equity	—		—	7		7
Total	$103		$266	$16		$385

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices     in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant     Unobservable     Inputs (Level 3)			Total
	(in millions)
Assets:
Domestic equity*		$	98		$	33		$	—		$	131
International equity*			16			39			—			55
Fixed income:
U.S. Treasury, government, and agency bonds			—			4			—			4
Mortgage- and asset-backed securities			—			3			—			3
Corporate bonds			—			7			—			7
Pooled funds			—			28			—			28
Cash equivalents and other			—			11			—			11
Trust-owned life insurance			—			132			—			132
Real estate investments			2			—			8			10
Private equity			—			—			8			8
Total		$	116		$	257		$	16		$	389

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011							2010
	Real Estate Investments			Private Equity				Real Estate Investments			Private Equity
	(in millions)
Beginning balance		$	8		$	8			$	8		$	8
Actual return on investments:
Related to investments held at year end			1			—				—			—
Related to investments sold during the year			—			—				—			—
Total return on investments			1			—				—			—
Purchases, sales, and settlements			—			(1	)			—			—
Transfers into/out of Level 3			—			—				—			—
Ending balance		$	9		$	7			$	8		$	8

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2011, 2010, and 2009 were $24 million, $23 million, and $25 million, respectively.

Gulf Power [Member]

RETIREMENT BENEFITS

2. RETIREMENT BENEFITS

The Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2011. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2012. The Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, the Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The Company funds its other postretirement trusts to the extent required by the FERC. For the year ending December 31, 2012, no other postretirement trust contributions are expected.

Actuarial Assumptions

The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2008 for the 2009 plan year using a discount rate of 6.75% and an annual salary increase of 3.75%.

	2011			2010			2009
Discount rate:
Pension plans		4.98	%		5.53	%		5.93	%
Other postretirement benefit plans		4.88			5.41			5.84
Annual salary increase		3.84			3.84			4.18
Long-term return on plan assets:
Pension plans*		8.45			8.45			8.20
Other postretirement benefit plans		8.11			8.18			8.36

* Net of estimated investment management expenses of 30 basis points.

The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio.

An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) is the weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO as of December 31, 2011 were as follows:

	Initial Cost Trend Rate			Ultimate Cost Trend Rate			Year That Ultimate Rate Is Reached
Pre-65		8.00	%		5.00	%		2019
Post-65 medical		6.00			5.00			2019
Post-65 prescription		6.00			5.00			2023

An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2011 as follows:

	1 Percent Increase			1 Percent   Decrease
	(in thousands)
Benefit obligation		$	3,446		$	(2,943	)
Service and interest costs			223			(191	)

Pension Plans

The total accumulated benefit obligation for the pension plans was $321 million at December 31, 2011 and $290 million at December 31, 2010. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011			2010
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	316,286			$  298,886
Service cost		8,431			7,853
Interest cost		17,074			17,305
Benefits paid		(13,807	)		(13,401)
Plan amendments		—			460
Actuarial loss (gain)		24,850			5,183
Balance at end of year		352,834			316,286
Change in plan assets
Fair value of plan assets at beginning of year		307,828			254,059
Actual return (loss) on plan assets		9,552			38,736
Employer contributions		751			28,434
Benefits paid		(13,807	)		(13,401)
Fair value of plan assets at end of year		304,324			307,828
Accrued liability	$	(48,510	)		$(8,458)

At December 31, 2011, the projected benefit obligations for the qualified and non-qualified pension plans were $336 million and $17 million, respectively. All pension plan assets are related to the qualified pension plan.

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s pension plans consist of the following:

	2011			2010
	(in thousands)
Prepaid pension costs	$	—		$	7,291
Other regulatory assets		115,853			75,096
Current liabilities, other		(794	)		(778	)
Employee benefit obligations		(47,716	)		(14,971	)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated     Amortization     in 2012
	(in thousands)
Prior service cost	$	6,402	$	7,664	$1,262
Net (gain) loss		109,451		67,432	3,913
Other regulatory assets	$	115,853	$	75,096

The changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory     Assets
	(in thousands)
Balance at December 31, 2009	$	85,194
Net (gain) loss		(8,857)
Change in prior service costs		459
Reclassification adjustments:
Amortization of prior service costs		(1,302)
Amortization of net gain (loss)		(398)
Total reclassification adjustments		(1,700)
Total change		(10,098)
Balance at December 31, 2010	$	75,096
Net (gain) loss		42,531
Change in prior service costs		—
Reclassification adjustments:
Amortization of prior service costs		(1,262)
Amortization of net gain (loss)		(512)
Total reclassification adjustments		(1,774)
Total change		40,757
Balance at December 31, 2011	$	115,853

Components of net periodic pension cost were as follows:

	2011			2010			2009
	(in thousands)
Service cost	$	8,431		$	7,853		$	6,478
Interest cost		17,074			17,305			17,139
Expected return on plan assets		(27,232	)		(24,695	)		(24,357	)
Recognized net (gain) loss		512			398			224
Net amortization		1,262			1,302			1,478
Net periodic pension cost	$	47		$	2,163		$	962

Net periodic pension cost is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets.

Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2011, estimated benefit payments were as follows:

	Benefit Payments
	(in thousands)
2012		$  15,372
2013		15,950
2014		16,655
2015		17,315
2016		18,045
2017 to 2021		104,528

Other Postretirement Benefits

Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011			2010
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year		$	69,617		$	72,640
Service cost			1,132			1,304
Interest cost			3,658			4,121
Benefits paid			(4,189)			(4,068)
Actuarial (gain) loss			292			(4,704)
Plan amendments			—			—
Retiree drug subsidy			413			324
Balance at end of year			70,923			69,617
Change in plan assets
Fair value of plan assets at beginning of year			15,697			14,973
Actual return (loss) on plan assets			514			2,010
Employer contributions			2,543			2,458
Benefits paid			(3,776)			(3,744)
Fair value of plan assets at end of year			14,978			15,697
Accrued liability		$	(55,945)		$	(53,920)

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s other postretirement benefit plans consist of the following:

	2011			2010
	(in thousands)
Regulatory assets	$	239		$	—
Regulatory liabilities		—			(166)
Current liabilities, other		(624	)		(211)
Employee benefit obligations		(55,321	)		(53,709)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2012.

	2011			2010		Estimated     Amortization     in 2012
	(in thousands)
Prior service cost	$	510		$	695	$186
Net (gain) loss		(464	)		(1,311)	—
Transition obligation		193			450	193
Regulatory assets (liabilities)	$	239		$	(166)

The changes in the balance of regulatory assets and regulatory liabilities related to the other postretirement benefit plans for the plan years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory Assets				Regulatory   Liabilities
	(in thousands)
Balance at December 31, 2009		$	5,861			$	—
Net (gain) loss			(5,455	)			(166	)
Change in prior service costs/transition obligation			—				—
Reclassification adjustments:
Amortization of transition obligation			(257	)			—
Amortization of prior service costs			(186	)			—
Amortization of net gain (loss)			37				—
Total reclassification adjustments			(406	)			—
Total change			(5,861	)			(166	)
Balance at December 31, 2010		$	—			$	(166	)
Net (gain) loss			635				166
Change in prior service costs/transition obligation			—				—
Reclassification adjustments:
Amortization of transition obligation			(257	)			—
Amortization of prior service costs			(186	)			—
Amortization of net gain (loss)			47				—
Total reclassification adjustments			(396	)			—
Total change			239				166
Balance at December 31, 2011		$	239			$	—

Components of the other postretirement benefit plans’ net periodic cost were as follows:

	2011			2010			2009
	(in thousands)
Service cost	$	1,132		$	1,304		$	1,328
Interest cost		3,658			4,121			4,705
Expected return on plan assets		(1,445	)		(1,481	)		(1,436	)
Net amortization		396			406			548
Net postretirement cost	$	3,741		$	4,350		$	5,145

Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 as follows:

	Benefit Payments			Subsidy Receipts				Total
	(in thousands)
2012		$	4,475		$	(481	)		$	3,994
2013			4,684			(537	)			4,147
2014			4,927			(597	)			4,330
2015			5,146			(661	)			4,485
2016			5,354			(729	)			4,625
2017 to 2021			27,719			(3,924	)			23,795

Benefit Plan Assets

Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension plan and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk.

The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2011 and 2010, along with the targeted mix of assets for each plan, is presented below:

	Target		2011			2010
Pension plan assets:
Domestic equity		26%		29	%		29	%
International equity		25		25			27
Fixed income		23		23			22
Special situations		3		—			—
Real estate investments		14		14			13
Private equity		9		9			9
Total		100%		100	%		100	%
Other postretirement benefit plan assets:
Domestic equity		25%		28	%		28	%
International equity		24		24			26
Domestic fixed income		26		26			25
Special situations		3		—			—
Real estate investments		13		13			12
Private equity		9		9			9
Total		100%		100	%		100	%

The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices.

Investment Strategies

Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above:

• Domestic equity. A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes, managed both actively and through passive index approaches.

• International equity. An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.

• Fixed income. A mix of domestic and international bonds.

• Special situations. Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies as well as investments in promising new strategies of a longer-term nature.

• Real estate investments. Investments in traditional private market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.

• Private equity. Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.

Benefit Plan Asset Fair Values

Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2011 and 2010. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate.

Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund.

The fair values of pension plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant     Unobservable     Inputs (Level 3)			Total
	(in thousands)
Assets:
Domestic equity*		$	51,686		$	23,857		$	—		$	75,543
International equity*			53,130			15,223			—			68,353
Fixed income:
U.S. Treasury, government, and agency bonds			—			19,375			—			19,375
Mortgage- and asset-backed securities			—			6,047			—			6,047
Corporate bonds			—			37,274			120			37,394
Pooled funds			—			16,998			—			16,998
Cash equivalents and other			30			6,228			—			6,258
Real estate investments			9,838			—			34,989			44,827
Private equity			—			—			26,053			26,053
Total		$	114,684		$	125,002		$	61,162		$	300,848

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices     in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)			Significant     Unobservable     Inputs (Level 3)			Total
	(in thousands)
Assets:
Domestic equity*		$	57,023			$	23,012		$	31		$	80,066
International equity*			57,515				19,940			—			77,455
Fixed income:
U.S. Treasury, government, and agency bonds			—				13,703			—			13,703
Mortgage- and asset-backed securities			—				11,122			—			11,122
Corporate bonds			—				26,760			92			26,852
Pooled funds			—				9,063			—			9,063
Cash equivalents and other			92				21,537			—			21,629
Real estate investments			8,295				—			30,355			38,650
Private equity			—				—			28,727			28,727
Total		$	122,925			$	125,137		$	59,205		$	307,267
Liabilities:
Derivatives			(31	)			—			—			(31	)
Total		$	122,894			$	125,137		$	59,205		$	307,236

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011							2010
	Real Estate Investments			Private Equity				Real Estate Investments			Private Equity
	(in thousands)
Beginning balance		$	30,355		$	28,727			$	24,699		$	25,053
Actual return on investments:
Related to investments held at year end			3,021			(538	)			2,596			2,954
Related to investments sold during the year			896			1,941				810			810
Total return on investments			3,917			1,403				3,406			3,764
Purchases, sales, and settlements			717			(4,077	)			2,250			(90	)
Transfers into/out of Level 3			—			—				—			—
Ending balance		$	34,989		$	26,053			$	30,355		$	28,727

The fair values of other postretirement benefit plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant     Unobservable     Inputs (Level 3)			Total
	(in thousands)
Assets:
Domestic equity*		$	2,445		$	1,128		$	—		$	3,573
International equity*			2,511			719			—			3,230
Fixed income:
U.S. Treasury, government, and agency bonds			—			918			—			918
Mortgage- and asset-backed securities			—			286			—			286
Corporate bonds			—			1,761			—			1,761
Pooled funds			—			1,328			—			1,328
Cash equivalents and other			1			295			—			296
Real estate investments			466			—			1,657			2,123
Private equity			—			—			1,232			1,232
Total		$	5,423		$	6,435		$	2,889		$	14,747

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices     in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant     Unobservable     Inputs (Level 3)			Total
	(in thousands)
Assets:
Domestic equity*		$	2,727		$	1,100		$	1		$	3,828
International equity*			2,751			955			—			3,706
Fixed income:
U.S. Treasury, government, and agency bonds			—			655			—			655
Mortgage- and asset-backed securities			—			533			—			533
Corporate bonds			—			1,280			—			1,280
Pooled funds			—			953			—			953
Cash equivalents and other			3			1,030			—			1,033
Real estate investments			396			—			1,452			1,848
Private equity			—			—			1,375			1,375
Total		$	5,877		$	6,506		$	2,828		$	15,211

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011							2010
	Real Estate Investments			Private Equity				Real Estate Investments			Private Equity
	(in thousands)
Beginning balance		$	1,452		$	1,375			$	1,326		$	1,346
Actual return on investments:
Related to investments held at year end			129			(26	)			30			—
Related to investments sold during the year			42			77				40			34
Total return on investments			171			51				70			34
Purchases, sales, and settlements			34			(194	)			56			(5	)
Transfers into/out of Level 3			—			—				—			—
Ending balance		$	1,657		$	1,232			$	1,452		$	1,375

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2011, 2010, and 2009 were $3.7 million, $3.6 million, and $3.7 million, respectively.

Mississippi Power [Member]

RETIREMENT BENEFITS

2. RETIREMENT BENEFITS

The Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2011. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2012. The Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, the Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The Company funds its other postretirement trusts to the extent required by the FERC. For the year ending December 31, 2012, other postretirement trust contributions are expected to be less than $1 million.

Actuarial Assumptions

The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2008 for the 2009 plan year using a discount rate of 6.75% and an annual salary increase of 3.75%.

	2011			2010			2009
Discount rate:
Pension plans		4.98	%		5.51	%		5.92	%
Other postretirement benefit plans		4.87			5.39			5.83
Annual salary increase		3.84			3.84			4.18
Long-term return on plan assets:
Pension plans*		8.45			8.45			8.20
Other postretirement benefit plans		7.53			7.65			7.62

* Net of estimated investment management expenses of 30 basis points.

The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio.

An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) is the weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO as of December 31, 2011 were as follows:

	Initial Cost Trend Rate	Ultimate Cost Trend Rate	Year That   Ultimate   Rate Is   Reached
Pre-65	8.00%	5.00%	2019
Post-65 medical	6.00	5.00	2019
Post-65 prescription	6.00	5.00	2023

An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2011 as follows:

	1 Percent Increase			1 Percent    Decrease
	(in thousands)
Benefit obligation		$	6,062		$	(5,156	)
Service and interest costs			365			(310	)

Pension Plans

The total accumulated benefit obligation for the pension plans was $339 million at December 31, 2011 and $307 million at December 31, 2010. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year		$330,315		$309,179
Service cost		8,838		8,300
Interest cost		17,827		17,916
Benefits paid		(14,587)		(12,206)
Plan amendments		—		48
Actuarial loss (gain)		27,287		7,078
Balance at end of year		369,680		330,315
Change in plan assets
Fair value of plan assets at beginning of year		283,698		218,015
Actual return (loss) on plan assets		10,805		33,780
Employer contributions		2,184		44,109
Benefits paid		(14,587)		(12,206)
Fair value of plan assets at end of year		282,100		283,698
Accrued liability		$ (87,580)		$ (46,617)

At December 31, 2011, the projected benefit obligations for the qualified and non-qualified pension plans were $344 million and $26 million, respectively. All pension plan assets are related to the qualified pension plan.

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s pension plans consist of the following:

	2011		2010
	(in thousands)
Other regulatory assets, deferred	$	117,354	$	78,130
Other current liabilities		(1,652)		(1,516)
Employee benefit obligations		(85,928)		(45,101)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated Amortization in 2012
	(in thousands)
Prior service cost	$	6,570	$	7,879	$1,309
Net (gain) loss		110,784		70,251	4,100
Other regulatory assets, deferred	$	117,354	$	78,130

The changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory     Assets
	(in thousands)
Balance at December 31, 2009		$  85,357
Net (gain) loss		(5,250)
Change in prior service costs		48
Reclassification adjustments:
Amortization of prior service costs		(1,391)
Amortization of net gain (loss)		(634)
Total reclassification adjustments		(2,025)
Total change		(7,227)
Balance at December 31, 2010		$  78,130
Net (gain) loss		41,647
Change in prior service costs		—
Reclassification adjustments:
Amortization of prior service costs		(1,309)
Amortization of net gain (loss)		(1,114)
Total reclassification adjustments		(2,423)
Total change		39,224
Balance at December 31, 2011		$117,354

Components of net periodic pension cost were as follows:

	2011		2010		2009
	(in thousands)
Service cost	$	8,838	$	8,300	$	6,792
Interest cost		17,827		17,916		17,577
Expected return on plan assets		(25,166)		(21,451)		(21,065)
Recognized net (gain) loss		1,114		634		539
Net amortization		1,309		1,391		1,578
Net periodic pension cost	$	3,922	$	6,790	$	5,421

Net periodic pension cost is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets.

Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2011, estimated benefit payments were as follows:

	Benefit     Payments
	(in thousands)
2012		$	15,125
2013			15,892
2014			16,722
2015			17,528
2016			18,457
2017 to 2021			109,185

Other Postretirement Benefits

Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2011 and 2010 were as follows:

	2011		2010
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	81,688	$	83,774
Service cost		1,012		1,305
Interest cost		4,292		4,763
Benefits paid		(4,094)		(4,245)
Actuarial loss (gain)		4,073		(2,511)
Plan amendments		—		(1,824)
Retiree drug subsidy		476		426
Balance at end of year		87,447		81,688
Change in plan assets
Fair value of plan assets at beginning of year		20,955		20,292
Actual return (loss) on plan assets		720		2,297
Employer contributions		2,477		2,185
Benefits paid		(3,618)		(3,819)
Fair value of plan assets at end of year		20,534		20,955
Accrued liability	$	(66,913)	$	(60,733)

Amounts recognized in the balance sheets at December 31, 2011 and 2010 related to the Company’s other postretirement benefit plans consist of the following:

	2011		2010
	(in thousands)
Other regulatory assets, deferred	$	13,324	$	8,618
Employee benefit obligations		(66,913)		(60,733)

Presented below are the amounts included in regulatory assets at December 31, 2011 and 2010 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2012.

	2011		2010		Estimated Amortization in 2012
	(in thousands)
Prior service cost	$	(2,686)	$	(2,873)	$(188)
Net (gain) loss		15,839		11,092	487
Transition obligation		171		399	171
Other regulatory assets, deferred	$	13,324	$	8,618

The changes in the balance of regulatory assets related to the other postretirement benefit plans for the plan years ended December 31, 2011 and 2010 are presented in the following table:

	Regulatory     Assets
	(in thousands)
Balance at December 31, 2009		$	14,332
Net (gain) loss			(3,316)
Change in prior service costs/transition obligation			(1,824)
Reclassification adjustments:
Amortization of transition obligation			(228)
Amortization of prior service costs			57
Amortization of net gain (loss)			(403)
Total reclassification adjustments			(574)
Total change			(5,714)
Balance at December 31, 2010		$	8,618
Net (gain) loss			4,980
Change in prior service costs/transition obligation			—
Reclassification adjustments:
Amortization of transition obligation			(228)
Amortization of prior service costs			188
Amortization of net gain (loss)			(234)
Total reclassification adjustments			(274)
Total change			4,706
Balance at December 31, 2011		$	13,324

Components of the other postretirement benefit plans’ net periodic cost were as follows:

	2011		2010		2009
	(in thousands)
Service cost	$	1,012	$	1,305	$	1,328
Interest cost		4,292		4,763		5,535
Expected return on plan assets		(1,763)		(1,826)		(1,783)
Net amortization		274		574		919
Net postretirement cost	$	3,815	$	4,816	$	5,999

Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 as follows:

	Benefit Payments		Subsidy Receipts			Total
	(in thousands)
2012		$  5,003		$  (584	)		$  4,419
2013		5,366		(643	)		4,723
2014		5,683		(717	)		4,966
2015		6,046		(791	)		5,255
2016		6,325		(871	)		5,454
2017 to 2021		34,852		(4,503	)		30,349

Benefit Plan Assets

Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension plan and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk.

The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2011 and 2010, along with the targeted mix of assets for each plan, is presented below:

	Target			2011			2010
Pension plan assets:
Domestic equity		26	%		29	%		29%
International equity		25			25			27
Fixed income		23			23			22
Special situations		3			—			—
Real estate investments		14			14			13
Private equity		9			9			9
Total		100	%		100	%		100%
Other postretirement benefit plan assets:
Domestic equity		20	%		22	%		23%
International equity		20			20			22
Fixed income		40			40			38
Special situations		2			—			—
Real estate investments		11			11			10
Private equity		7			7			7
Total		100	%		100	%		100%

The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices.

Investment Strategies

Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above:

• Domestic equity. A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes, managed both actively and through passive index approaches.

• International equity. An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.

• Fixed income. A mix of domestic and international bonds.

• Special situations. Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies as well as investments in promising new strategies of a longer-term nature.

• Real estate investments. Investments in traditional private market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.

• Private equity. Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.

Benefit Plan Asset Fair Values

Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2011 and 2010. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate.

Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund.

The fair values of pension plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant     Unobservable     Inputs (Level 3)		Total
	(in thousands)
Assets:
Domestic equity*		$  47,911		$  22,115		$       —		$  70,026
International equity*		49,250		14,111		—		63,361
Fixed income:
U.S. Treasury, government, and agency bonds		—		17,960		—		17,960
Mortgage- and asset-backed securities		—		5,605		—		5,605
Corporate bonds		—		34,552		112		34,664
Pooled funds		—		15,757		—		15,757
Cash equivalents and other		28		5,773		—		5,801
Real estate investments		9,119		—		32,434		41,553
Private equity		—		—		24,151		24,151
Total		$106,308		$115,873		$56,697		$278,878

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant     Unobservable     Inputs (Level 3)		Total
	(in thousands)
Assets:
Domestic equity*		$  52,553			$  21,208		$        28		$  73,789
International equity*		53,006			18,377		—		71,383
Fixed income:
U.S. Treasury, government, and agency bonds		—			12,629		—		12,629
Mortgage- and asset-backed securities		—			10,250		—		10,250
Corporate bonds		—			24,663		85		24,748
Pooled funds		—			8,353		—		8,353
Cash equivalents and other		85			19,849		—		19,934
Real estate investments		7,645			—		27,976		35,621
Private equity		—			—		26,475		26,475
Total		$113,289			$115,329		$54,564		$283,182
Liabilities:
Derivatives		(28	)		—		—		(28	)
Total		$113,261			$115,329		$54,564		$283,154

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011						2010
	Real Estate Investments			Private Equity			Real Estate Investments			Private Equity
	(in thousands)
Beginning balance		$	27,976		$	26,475		$	21,195		$21,498
Actual return on investments:
Related to investments held at year end			2,964			(498)			3,959		4,313
Related to investments sold during the year			830			1,951			747		747
Total return on investments			3,794			1,453			4,706		5,060
Purchases, sales, and settlements			664			(3,777)			2,075		(83)
Transfers into/out of Level 3			—			—			—		—
Ending balance		$	32,434		$	24,151		$	27,976		$26,475

The fair values of other postretirement benefit plan assets as of December 31, 2011 and 2010 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. Assets that are considered special situations investments are presented in the tables below based on the nature of the investment.

	Fair Value Measurements Using
As of December 31, 2011:	Quoted Prices     in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant     Unobservable     Inputs (Level 3)		Total
	(in thousands)
Assets:
Domestic equity*		$2,733		$  1,260		$      —		$  3,993
International equity*		2,807		804		—		3,611
Fixed income:
U.S. Treasury, government, and agency bonds		—		4,796		—		4,796
Mortgage- and asset-backed securities		—		320		—		320
Corporate bonds		—		1,968		—		1,968
Pooled funds		—		898		—		898
Cash equivalents and other		1		987		—		988
Real estate investments		520		—		1,851		2,371
Private equity		—		—		1,377		1,377
Total		$6,061		$11,033		$3,228		$20,322

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

	Fair Value Measurements Using
As of December 31, 2010:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets:
Domestic equity*		$3,049		$  1,230		$      1		$  4,280
International equity*		3,076		1,068		—		4,144
Fixed income:
U.S. Treasury, government, and agency bonds		—		4,632		—		4,632
Mortgage- and asset-backed securities		—		596		—		596
Corporate bonds		—		1,431		—		1,431
Pooled funds		—		485		—		485
Cash equivalents and other		4		1,408		—		1,412
Real estate investments		442		—		1,625		2,067
Private equity		—		—		1,538		1,538
Total		$6,571		$10,850		$3,164		$20,585

* Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.

Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2011 and 2010 were as follows:

	2011				2010
	Real Estate Investments		Private Equity		Real Estate Investments		Private Equity
	(in thousands)
Beginning balance		$1,625		$1,538		$1,475		$1,497
Actual return on investments:
Related to investments held at year end		141		(29)		29		47
Related to investments sold during the year		47		85		—		—
Total return on investments		188		56		29		47
Purchases, sales, and settlements		38		(217)		121		(6)
Ending balance		$1,851		$1,377		$1,625		$1,538

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2011, 2010, and 2009 were $3.8 million, $3.8 million, and $3.9 million, respectively.